Tesla Insiders Are Calling Its AI Future A Dead End

Musk's hype is rapidly fading.

Tesla Optimus — Tesla

Tesla sales have continued their downward trend despite the launch of the new Model Y. As such, Tesla is almost certainly unprofitable, just as it was back in the first quarter of 2025. However, Musk isn’t trying to revive Tesla’s EV business — quite the opposite, in fact. He appears to be completely abandoning it and betting the entire company’s future on AI. At Musk’s behest, Tesla has effectively dropped all its development projects to focus entirely on the self-driving Cybercab and AI robot Optimus, making these ventures the only viable route to growth. Unfortunately, there is a problem with this plan: not only is it moronic on its face, but even Tesla insiders who played pivotal roles in designing and creating the Cybercab and Optimus say it simply won’t work. In effect, this is Tesla itself acknowledging that Musk has forced the company down a dead end.

I have already covered the findings of Rohan Patel, Tesla’s former head of business development and policy internal analysis for the Cybercab, so if you want more details, read the article here. However, in short, he discovered that even if Tesla could get its FSD (Full Self-Driving) system and Cybercab to work, it wouldn’t be a moneymaker. Why? Two reasons: sales and operations.

Instead of operating Cybercabs, Musk effectively wants to sell them at cost or even at a loss, and then make money by selling access to the FSD software. This is odd, given that operating Cybercabs is theoretically far more profitable than selling them, and it makes significant issues like liability more obvious. But FSD is highly unpopular, with customers only using it 15% of the time, polls revealing that 77% of people don’t trust the system, and 48% of people believing it should be illegal. So, Patel realised that a vehicle that can only be operated by FSD, with no option to take back control, would not sell well at all. In fact, Patel advised Elon to abandon robotaxis and focus on affordable EVs instead.