Is Elon Musk Killing Tesla—Or Is the Economy to Blame?

Tesla’s demand problem is a perfect storm of politics and economic woes

Tesla, once the undisputed king of EVs, is facing a historic slump. Sales are dropping, protesters are vandalizing showrooms, and even die-hard bulls like Cathie Wood admit the company is taking a 'demand hit.' But is this Elon Musk’s fault—or a sign of deeper economic trouble? And can Tesla’s rumored robotaxi network save its future? Let’s unpack the debate.

🔥 Why Tesla’s Stock Is Stumbling

Three key factors are squeezing Tesla:

• ⚡ Musk’s polarizing politics: Protests at Tesla stores and vandalism of vehicles linked to Musk’s controversial statements. In Europe, buyers are actively avoiding Tesla over CEO backlash.
• ⚡ Economic headwinds: U.S. consumer confidence at a 12-month low, global auto layoffs (Nissan cut 9,000 jobs), and tariffs threatening carmakers’ bottom lines.
• ⚡ EV competition: China’s BYD and others are eating into Tesla’s market share, while Ford and GM scale back EV investments amid slowing sales.

✅ Tesla’s Hail Mary: Autonomous Cars and the $25K Model

Cathie Wood insists Tesla’s $2,600 price target depends on two bets:

• ✅ The $25,000 'Model 2': A cheaper EV slated for late 2025 could democratize Tesla ownership—if it launches on time (past delays haunt investor trust).
• ✅ Robotaxis: Musk claims Tesla’s 5 million existing cars could become self-driving taxis overnight via a software update. I believe this could be Tesla’s golden ticket—transforming it from a carmaker into a mobility-as-a-service giant.

Wood argues autonomy will 5x the utility of every Tesla on the road. As the author, I see even bigger potential: a global robotaxi network could generate recurring revenue streams, dwarfing traditional car sales by 2030.

⚠️ The Obstacles Ahead

Tesla’s path isn’t smooth:

• 🚧 Musk’s baggage: His political stance risks alienating core buyers. In March, 9 protesters were arrested at a NYC Tesla store.
• 🚧 Self-driving delays: Full autonomy remains unproven. Tesla’s 'Full Self-Driving' still requires human oversight—regulators won’t greenlight robotaxis until it’s flawless.
• 🚧 Recession risks: Major banks warn of economic downturn. If consumers stop buying cars altogether, even a $25K Tesla might struggle.

🚀 Final Verdict: Bet on Software, Not Cars

Tesla’s future hinges less on selling vehicles and more on perfecting AI. If it cracks autonomy, the robotaxi play could justify Wood’s $2,600 target. But that’s a big 'if.' Here’s my take:

• 📈 70% upside: If Tesla launches a truly autonomous system by 2027 and avoids recession, the stock could soar.
• 📉 30% risk: Prolonged self-driving delays or Musk’s political drama could tank consumer trust irreversibly.

My prediction? Tesla’s software will mature enough for limited robotaxi trials by 2028, creating a huge revenue stream by 2030. But the next 2 years will be rocky. What do you think—can Musk pull this off? Let us know on X(Former Twitter)

Sources: Paolo Confino. Tesla bull Cathie Wood says it isn’t just Elon Musk’s politics that are causing Tesla’s ‘demand hit.’ It’s also a bad economy, March 26, 2025.