Key Points
- Tesla’s car business is still almost entirely dependent on the aging Model 3 and Model Y platform.
- The company has no new mass-market, human-driven vehicles in its product pipeline.
- Elon Musk is refocusing the company on long-term bets like robotaxis and humanoid robots.
- Tesla’s sales and profits are falling, and its customer loyalty has been slipping.
Tesla’s groundbreaking Model 3 and Model Y sedans changed the world and made Elon Musk the richest man on the planet. But years later, Tesla’s core car business is still almost entirely dependent on that one, aging breakthrough, and there’s nothing new for human drivers in the pipeline.
The company’s only new model since 2020, the controversial Cybertruck, has been a flop. A new Roadster supercar, promised back in 2017, has yet to materialize. And a plan to build a $25,000 mass-market EV was recently killed. Instead, Musk is refocusing the company on the futuristic, long-shot bets of self-driving robotaxis and humanoid robots.
This apparent neglect of the car business, which pays the bills, poses a major risk for investors. While other automakers, especially the fast-moving EV companies in China, are launching new models at a dizzying pace, Tesla’s lineup is looking increasingly “stale.”
Tesla seems to believe it can treat its cars like iPhones, with incremental software updates being enough to keep them competitive. But the data tells a different story. The company’s customer loyalty rate plunged last year and only recovered after it started offering big discounts. Sales are down this year, and profits just fell by 37%.
With no new mass-market cars on the horizon, Tesla is defying the fundamental law of the auto industry: that sales fall as models age. The big question now is whether Tesla’s bet on software and a single, aging platform can keep it on top, or if it will “be paying a price” for letting its core business go stale.
