Tesla investors are growing wary of Elon Musk's futuristic promises

At Tesla, conveyance income are slumping, profits are thinning and gross from regulatory recognition income are poised to adust up owed to Republican-led policy changes.

In the past, CEO Elon Musk's futuristic promises person convinced investors to look past apical and bottommost enactment numbers.

Not now.

Following different reasonably dismal earnings report this week, Musk told analysts connected the telephone that Tesla's electrical vehicles volition soon go driverless, making wealth for owners portion they sleep. He besides said Tesla's robotaxi service, which the institution precocious started investigating successful a constricted capableness successful Austin, Texas, volition grow to different states, with a extremity of being capable to scope fractional the U.S. colonisation by year-end, "assuming we person regulatory approvals."

It didn't matter.

Tesla shares plummeted 8% connected Thursday arsenic investors focused connected the contiguous challenges facing the company, including the accelerated emergence of lower-cost EV competitors, peculiarly successful China, and a governmental backlash against Musk that harmed Tesla's marque successful the U.S. and Europe.

Automotive income declined 16% year-over-year successful the 2nd 4th for the EV maker, with weak sales numbers continuing successful Europe and California. Musk said determination could beryllium a "few unsmooth quarters" up due to the fact that of the EV credits expiring and President Donald Trump's tariffs.

The banal bounced backmost immoderate connected Friday, gaining 3.5%, but inactive ended the week down and has present fallen 22% this year, the worst show among tech's megacaps. The Nasdaq roseate 1% for the week and is up much than 9% successful 2025, closing astatine a grounds connected Friday.

"Look, we emotion robotaxis. And robots," wrote analysts astatine Canaccord Genuity, who urge buying Tesla's stock, successful a enactment aft the net report. "Over time, Tesla is good positioned to payment from these future-forward opportunities."

The analysts, however, said that they're focused connected the nett and nonaccomplishment statement, writing: "But we emotion maturation too, successful the present and now. We request the P&L dynamics to turn."

Analysts astatine Jefferies described the net update arsenic "a spot dull." And Goldman Sachs said Tesla's robotaxi effort is "still small" with constricted method information points.

Tesla didn't respond to a petition for comment.

Musk, who has antecedently called himself "pathologically optimistic," has been capable to sway shareholders and nonstop the banal soaring astatine times with promises of self-driving cars, humanoid robots and more affordable EVs.

But aft a decennary of missed self-imposed deadlines connected autonomous driving, Wall Street is watching Tesla autumn down Alphabet's Waymo successful the U.S. and Baidu's Apollo Go successful China.

In Tesla's shareholder deck, the institution said the 2nd 4th marked the commencement of its "transition from starring the electrical conveyance and renewable vigor industries to besides becoming a person successful AI, robotics and related services." The institution didn't connection immoderate caller guidance for maturation oregon profits for the twelvemonth ahead.

Business Insider reported connected Friday that Tesla told unit its robotaxi work could motorboat successful the San Francisco Bay Area arsenic soon arsenic this weekend.

But Tesla hasn't applied for permits that would beryllium required to tally a driverless ridehailing work successful California, CNBC confirmed. The institution would archetypal request authorizations from the state's Department of Motor Vehicles and the California Public Utilities Commission (CPUC).

The CPUC told CNBC connected Friday, that nether existing permits, Tesla tin lone run a human-driven chartered conveyance service, not transportation passengers successful robotaxis.

On the net call, Musk and different Tesla execs claimed the institution was moving connected regulatory approvals to motorboat successful Nevada, Arizona, Florida and different markets, successful summation to San Francisco, but offered nary details astir what would beryllium required.

Within Austin, the institution said its robotaxi work had driven 7,000 miles, and that Tesla has been restricting its robotaxis' to roads with a velocity bounds of 40 miles per hour. The Austin work involves a tiny fleet of astir 10 to 20 Model Y vehicles equipped with the company's latest self-driving systems.

The Tesla robotaxis trust connected distant supervision by employees successful a lawsuit work center, and a quality information supervisor successful the beforehand rider seat, acceptable to intervene if needed.

Compare that to what Alphabet said connected its second-quarter earnings telephone the aforesaid time arsenic Tesla's results.

"The Waymo Driver has present autonomously driven implicit 100 cardinal miles connected nationalist roads, and the squad is investigating crossed much than 10 cities this year, including New York and Philadelphia," Alphabet said. Meanwhile, Waymo has go important capable that Alphabet added a class to its Other Bets gross statement successful its latest quarterly filing.

"Revenues from Other Bets are generated chiefly from the merchantability of autonomous proscription services, healthcare-related services and net services," the filing said. The Other Bets conception remains comparatively small, with gross coming successful astatine $373 cardinal successful the quarter. 

Regardless of capitalist skepticism, Musk is much bullish than ever.

On Friday, the world's richest idiosyncratic posted connected his societal web X that helium thinks Tesla volition someday beryllium worthy $20 trillion. On the net telephone earlier successful the week, helium said that erstwhile it comes to AI for cars and robots, "Tesla is really overmuch amended than Google by far" and "much amended than anyone astatine existent satellite AI."

CORRECTION: The Waymo Driver has present autonomously driven implicit 100 cardinal miles connected nationalist roads, according to Alphabet. A erstwhile mentation misstated the fig of miles.

WATCH: Tough 4th for Tesla