Elon Musk wants you to focus on everything but Tesla’s struggling electric car business

Over the course of yesterday’s hour-long earnings call, Tesla Technoking Elon Musk spent a lot of time discussing Tesla’s other businesses. Optimus robots! Real-world AI! Autonomous ride hailing! Semis! Energy storage! Solar roofs! How the company could be the “ most valuable company in the world by far.” At one point, he muttered to himself, “Earth to Elon.” Very little time was spent on regular electric vehicles, the ones people drive and which make up the bulk of the company’s revenue.

Partly that’s just what Musk does: sells a dream, where Tesla is an AI, autonomous vehicle, and robotics venture instead of a lowly car company. “ My prediction long-term is that Optimus will be overwhelmingly the value of the company,” Musk said. If you focus too much on regular EVs, the present, or, God forbid, last quarter’s numbers, you are dull and unimaginative. 

Partly, that’s because the present day looks very bad.

Tesla missed the Street’s expectations on a number of fronts. Tesla sold fewer cars in 2024 than it did in 2023, especially in the US. As such, automotive revenue was down 8% in the fourth quarter and down 6% for the year.

Thanks at least in part to Musk’s political machinations, would-be electric vehicle buyers would much rather purchase a Toyota.

Average sales prices were down — not because the company released its long-teased affordable car, but rather because Tesla has had to slash prices to move the meager number of vehicles it did. As a result, its margins declined.

Profit dropped a whopping 53% thanks to the declining sales price as well as increased operating expenses driven by AI and other R&D projects, the company said. That was despite a $600 million mark-to-market benefit from bitcoin.

A good chunk of the profit also came from growth in regulatory credits, an uncertain income source going forward in the Trump administration.

Last quarter, Musk predicted Tesla’s vehicle sales would grow 20% to 30% in 2025. Now that’s been modulated to a “return to growth” this year. What a difference a quarter makes.

There were of course some highlights, much of them slated to happen sometime in the future.

Energy generation and storage revenue grew 67% in 2024 and 113% in Q4. The company expects energy storage deployments to grow at least 50% this year.

Plans for more affordable car models are still on track for the first half of this year, though Musk gave few details on what exactly those are.

Importantly, Musk also said Tesla will begin offering paid rides in autonomously driven Teslas in Austin this June, “many regions” of the US by year-end, and everywhere in North America next year. (Notably, Google’s Waymo is already in Austin and is moving to 10 new cities this year as well.)

Of course, take Musk’s future timelines with a shaker of salt.

The richest man in the world can will outcomes into existence mortals can’t, and to some extent an investment in Tesla is an investment in Musk himself, but that doesn’t make it good business. And connections and clout can conceal a variety of ills. Pointing in every other direction doesn’t mean you shouldn’t keep your eyes on the road (the one that exists, now).

For Tesla bulls, of course, Musk and his company can do no wrong. The stock was up 4% after its earnings statement was released yesterday, despite all the bad news, and remains up over 4% in premarket trading.