Tesla

An American electric-vehicle maker led by Elon Musk. Tesla's market value peaked at around $1.5trn in December 2024.

In the first quarter of 2025 Tesla delivered 337,000 vehicles, 13% fewer than a year before. Revenue from electric vehicles was down by a fifth year on year, and operating profit fell by two-thirds. In Europe, which makes up around a fifth of sales, registrations of new Teslas slid by 40%. In America, Tesla's biggest market, sales fell by almost 9% even as those of all EVs rose by 11%.

Musk's political activities as head of the Department of Government Efficiency (see DOGE) have contributed to a consumer backlash. Sales shrank in left-leaning American cities in 2024 while growing in right-leaning ones. By early 2025, however, listings of used Teslas had risen by two-thirds since the start of the year—twice as much as for other EVs—in both left-leaning and right-leaning states, suggesting even Republican buyers were turning away.

Tesla made $2.8bn selling carbon credits in 2024, purchased by carmakers such as Ford to help meet federal fuel-economy standards. Donald Trump's elimination of fines for carmakers that fail to meet such standards has cut the need for rivals to buy these credits; Ford alone has lowered the value of credits it intends to buy in 2025 by $1.5bn.

Tesla faces growing competition from rivals such as General Motors in America and BYD in China and elsewhere.

Robotaxis

Tesla has expanded its rudimentary robotaxi service (which still has a human "safety monitor" in the car) from Austin, Texas, to San Francisco. Its technology sits between Levels 2 and 3 of autonomous driving, meaning it still requires a supervisor in the vehicle. Unlike Waymo, which uses 13 cameras, six radars and four lidars, Tesla relies solely on eight cameras and AI-enabled software. Musk is betting that this camera-only approach will give Tesla the edge as its technology improves, making its robotaxis cheaper than Waymo's. He has said he may license Tesla's self-driving technology to others. Tesla has spent billions of dollars training its AI systems on 100,000 Nvidia GPUs. Musk has said he hopes millions of autonomous Teslas will be roaming America's streets by the second half of 2026, though analysts regard this as wildly ambitious. One obstacle is that autonomous vehicles in America are regulated at state level, with no consistent federal framework. Musk had hoped for a new federal law that might ease the path for his technology, but his falling-out with Donald Trump in June 2025 made lighter regulation less likely, lengthening the road to profitability. It remains uncertain whether the robotaxi business will be more profitable than a human-driven taxi for many years, if ever.

Tesla is also developing the Optimus humanoid robot (see humanoid robots).

Model discontinuations and AI pivot

In early 2026 Tesla announced it would cease making the Model S, its first mass-produced electric car, and Model X, its gull-winged SUV. Together the two models accounted for just 2% of Tesla's vehicle production in 2025. The factory space will be repurposed to manufacture Optimus. Musk has set a target of making 1m Optimus robots a year by the end of 2027. Tesla is also investing heavily in the Cybercab, a two-seater self-driving taxi set to go into full production in April 2026.

Vehicle sales in 2025 fell by 9%, the second consecutive year of decline. In Europe they plunged by a quarter. Competition from both legacy carmakers and Chinese newcomers has stiffened. On January 28th 2026 Tesla stated that it had invested $2bn in xAI. The two companies are increasingly sharing software, data and chips. Musk recently secured a pay deal worth up to $1trn that may be put in doubt by any merger of Tesla into his broader empire.

Musk's pay and corporate control

In 2018, when Tesla was worth around $50bn, shareholders approved a plan to link Musk's pay to the company's value. By January 2024 the carmaker and his stock options were worth more than $600bn and $50bn respectively, but Delaware's chancery court ruled the package illegal, finding that the board had not been transparent about how it was set. That summer shareholders voted to reincorporate Tesla in Texas and reapprove the compensation, but the court killed it again in winter. On November 6th 2025 more than 75% of Tesla's shareholders backed a new compensation package granting Musk up to $1trn-worth of shares over ten years. The Norwegian sovereign wealth fund, Calpers and New York City's retirement systems all voted against it. To pocket it all, he must lift Tesla's market capitalisation to $8.5trn, from $1.4trn at the time of the vote. In its annual reports Tesla states explicitly that it is "highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer"; the latest report mentions him by name 25 times (not counting signatures). Earlier, on August 3rd 2025, Tesla's board had given Musk new options worth $24bn—the largest pay cheque in history, and more than Tesla's net profit during the past two years—as an insurance policy should the old package not be revived. The new deal would raise Musk's stake from 13% to 15%; the 2018 package entitled him to 20%. Musk has said he wants 25% if he is to advance Tesla's AI and robotics capabilities, enough control to prevent him being ousted by an activist investor. His investment in Tesla makes up less than half of his paper wealth; he also holds large stakes in SpaceX, xAI (which he has merged with X) and various other enterprises.