Tesla's Promised Future Isn't Materialising

From FSD to 4680, the narrative is falling apart.

Photo by Jannes Glas on Unsplash

Cast your mind back to 2020–2021. Yes, somehow, despite the global pandemic, things seemed better back then than they do today. But this was an especially pivotal time for Tesla, as it marked a significant shift in the company’s objectives. Take their Full Self-Driving (FSD). In 2020, Musk launched the beta version of FSD and claimed it would be feature-complete by the end of the year (which it wasn’t). By 2021, Musk revealed that Tesla was actively in talks to license FSD to other automakers. This mirrors their “revolutionary” 4680 battery. Announced in 2020, this battery promised to be significantly cheaper than anything else on the market and would enable Tesla to further undercut its competition. However, Musk also announced that they would supply this battery to other automakers in time. Basically, Tesla was trying to position itself as a monolithic industry supplier, rather than just a customer-facing manufacturer. No automaker would even attempt to build their own in-house batteries or autonomous system if they could just buy Tesla’s for less. This push to become the De Beers of mobility technology was one of the main reasons Tesla’s valuation skyrocketed during this period. But this narrative has begun to totally fall apart.

Let’s start with FSD.

Licensing out this tech was more important than you might realise. Analysts have projected that licensing FSD to other automakers could generate tens of billions in annual revenue for Tesla by 2030. But even the most optimistic of analysts predict that FSD will bring in, at most, $75 billion in annual revenue by 2030, with more realistic projections hovering around $10 billion. So, FSD licensing was set to be a vital component of Tesla’s efforts to generate revenue from this system.

Unfortunately, not only is this licensing simply not happening, but the opportunity to license it has functionally closed.

Back in November of last year, Musk posted on Twitter/X that it was “crazy” that other automakers didn’t want to license FSD. He added, “When legacy auto does occasionally reach out, they tepidly discuss implementing FSD for a tiny program in five years with unworkable requirements for Tesla; so pointless.” We can only speculate as to why these other manufacturers haven’t taken up Musk’s offer. Some experts have stated that it likely stems from a desire not to undermine their brand and a recognition of the benefits of an internally built system. Personally, I think it is because FSD is horrifically dysfunctional (read more here), and that these companies don’t want to be associated with Musk, or rely on him, for obvious reasons.

However, every automaker speculated to potentially license FSD, namely Ford, Rivian, GM and Stellantis, have all recently announced their own internal programs, and will be building their self-driving autonomous systems in-house. Meanwhile, other legacy automakers, like VW, Mercedes and BMW, already operate their own successful self-driving programs.

In other words, Tesla is having the door slammed in its face. In addition to not wanting to use their system, automakers are building rival systems at a rapid pace. And they aren’t likely to change their minds either, as a handful of consultants have suggested that it is actually cheaper for them to develop their own system than to buy into FSD, given that integrating it could be enormously expensive.

This critical part of the sizeable FSD revenue that Tesla had promised has not materialised at all. As such, there is more pressure than ever to convince as many owners to join the FSD bandwagon as possible. And even that isn’t going well.

FSD is technically locked out of its biggest market because it has failed to obtain regulatory approval in Europe and China. To unlock these millions of potential FSD customers, Musk has to secure regulatory approval. While speaking at the WEF, Musk stated, “We hope to get Supervised self-driving approval in Europe next month, and hopefully similar timing for China.” So, it sounds like this is happening, right?

Well, no.

Obtaining FSD approval in Europe is really hard — so hard, in fact, that Tesla is chasing after a loophole in the Netherlands. If they can get an exemption there, then every EU state kind of has to follow this exemption. Now, Musk claimed a while back that the Dutch regulator was on track to approve FSD in February 2026, which he then reaffirmed at WEF. However, the Dutch regulator actually published a statement to clarify that Tesla plans to demonstrate FSD Supervised in February. That is a gaping difference and suggests FSD is nowhere near EU regulatory approval.

As for China, less than 24 hours after Musk made these claims at WEF, Chinese state media reported that Musk’s claim that FSD would be approved “next month” is simply “not true” and that it does not align with the current regulatory reality.

In both instances, reports from the very regulators of these markets have stated Musk’s claims are not true. So, don’t expect FSD to be available in either territory any time soon.

This is incredibly bad news for Tesla, as FSD really needs new customers! In a recent earnings call, Vaibhav Taneja, Tesla’s CFO, stated that the FSD adoption rate is still pitifully low at “around 12% of our current fleet” and that FSD revenue actually fell in Q2 2025 compared to Q2 2024.

The entire narrative of how FSD was going to generate Tesla tens of billions of dollars in annual revenue has completely fallen apart. The system is not capable enough for global rollout, limiting it to just a few markets. Within those markets, it is a total sales flop, and not only does no one want to license FSD, but the entire automotive industry is moving towards independently developing these systems, rendering licensing this kind of tech totally unnecessary.

It’s important to remember that this hypothetical colossal revenue was one of the major justifications for Tesla’s stock hitting the ceiling. So, the implication of this unravelling narrative should be huge.

Arguably, the same is true, if not worse, for the 4680 battery. It has a terrible charge curve, is less energy dense than its predecessor, is not as cheap to make as initially claimed, and experiences enormous technical bottlenecks, which severely reduce production capacity. As such, the only Tesla currently built with 4680 batteries is the Cybertruck. In fact, it looks like the entire 4680 production line is being slowly phased out, as the supply chain is now functionally dead after a major material supplier cancelled their contract with Tesla.

In other words, the 4680 was so awful that it doesn’t even make sense for Tesla to use it, let alone sell it to other automakers. Again, the 4680 was supposed to make Tesla by far cheaper and more profitable than any other EV maker, enabling it to dominate not just the EV market but also the battery market. Analysts once predicted the 4680 alone would drive a whopping 25% annual revenue growth for Tesla, year after year, from 2025 onwards. This was yet another justification for Tesla’s insane value spike in the early 2020s. Yet this narrative is also falling apart.

Tesla has failed to stick the landing. Musk’s promises that Tesla’s technological and economic advantage would turn it into a critical monopolistic industry supplier are falling flat. Once again, reality has destroyed Musk’s outlandish “Look at me!” claims. This failure would be reflected in Tesla’s valuation if the economy were even remotely healthy. The fact that it isn’t is damning, to say the least.

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Thanks for reading! Everything expressed in this article is my opinion, and should not be taken as financial advice or accusations. Don’t forget to check out my YouTubechannel for more from me, or Subscribe. Oh, and don’t forget to hit the share button below to get the word out!

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Sources: BI, NATA, Electrek, TC, RDW, Road To Autonomy, Electrek, Green Car Report, AutoEvolution, Will Lockett, Car Buzz, Seeking Alpha