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Tesla’s Challenges and Future Prospects
Elon Musk envisions Tesla becoming the world’s most valuable company through autonomous vehicles and humanoid robots, but these product platforms are years away from generating significant revenue. Currently, 74% of Tesla’s revenue stems from its electric vehicle (EV) business, which is experiencing a troubling decline, with a 13% drop in EV deliveries during the first half of 2025 compared to last year.
Tesla delivered 720,803 EVs in the first six months of 2025, leading to a 9% revenue decline in Q1 and a 12% decline in Q2. In Germany, Tesla’s sales plummeted by 60% in June, despite an overall growth of 8.6% in EV sales, primarily due to competition and pricing issues with cheaper alternatives like BYD’s Dolphin Surf EV. To counteract these challenges, Tesla is set to introduce a low-cost EV designed on the Model Y platform.
During a recent investor conference, Musk indicated that while the Cybercab robotaxi is expected to begin mass production next year, regulatory hurdles remain, restricting broader deployment of Tesla’s autonomous services. Additionally, Tesla’s earnings per share fell 18% in Q2, leading to a price-to-earnings ratio of 180.7, significantly higher than competitors like Nvidia. Analysts suggest a potential 70% crash in Tesla’s stock could occur if earnings continue to decline.
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