The Walls Are Closing In On Tesla
Musk has destroyed every path forward.
Thanks to his combination of ignorance, grift and hubris, Elon Musk is the king of self-destruction. Just take Tesla’s weird door handles. Back in 2016, Musk personally pushed for almost all vehicle functions, including the door handles, to be controlled by electric buttons or touchscreens. His own engineers and executives warned that this is a huge safety risk, as if the battery pack fails, as it very well can in a crash, then the doors can’t be opened by the occupants or rescue services. They argued for traditional, fully mechanical door handles, but Musk vetoed them for purely aesthetic reasons. He even pushed for the mechanical override, meant to be used in such emergencies, to be hidden, which made it hard, or even impossible, to use in emergencies. As such, entrapment is a significant safety risk for occupants of Teslas. At least 15 deaths have been attributed to this self-imposed safety flaw so far. This problem is so bad that China is banning Tesla-style car door handles by the end of the year, and the US Congress is in the process of passing a bill to do the same. As such, Musk and Tesla now look like utterly inept pillocks, and Tesla will have to spend millions of dollars redesigning their door handles and retooling their production lines. Now, if Musk can cock up so dramatically, and be so arrogant, ignorant and authoritarian over such a simple thing, how can you expect him to take Tesla forward successfully? Well, you can’t, and it shows, because every way Musk is desperately trying to grow Tesla is flat out failing.
Prepare for a very long and detailed rant about how utterly f**ked Tesla is in 2026.
Electric Vehicle Failure
I mean, take what is meant to be Tesla’s core business, selling EVs. Things are not going well for Tesla here at all!
BYD has officially surpassed Tesla as the world’s largest maker of battery electric vehicles (BEVs). Tesla’s annual sales declined by 9% in 2025 compared to 2024. But BYD’s annual sales increased 27.9% in 2025 compared to 2024. That meant it sold a whopping 38% more BEVs than Tesla in 2025!
But it wasn’t just BYD outselling Tesla. In Europe, VW’s annual BEV sales increased by 78% in the first half of 2025 compared to H1 2024, and outsold Tesla, whose annual sales in Europe declined by 33% in H1 2025 compared to H1 2024. This doesn’t include VW’s other subsidiary brands, like Audi, Cupra, Škoda, and Porsche. If you include these brands in VW’s BEV sales, they outsold Tesla three to one! The data currently available for the entire of 2025 suggests Tesla’s European performance was even worse in the second half of 2025, with a 27.8% decline in total sales compared to 2024 and strong sales from its competitors.
This is more than just political backlash to Musk. All the brands and EV models currently trouncing Tesla’s sales have something in common. The brands have dramatically expanded their EV line-ups, offering a plethora of new and unique choices. But, the best-selling among these new choices, and these EVs that are out-selling Teslas, are cheaper, yet still capable, more mass-market focused EVs, like the Renault 5, Škoda Elroq and VW ID.3. What’s more, the brands outselling Tesla, such as BYD, VW and Renault, have all had wild success designing, and building their own brilliant EV batteries in-house to reduce costs, and increase efficiency.
Why is all that important?
Well, if you cast your mind back to the start of the decade, Tesla planned to grow in this exact same way. They would expand their line-up with a pickup truck and a smaller, cheaper mass-market model. And all these models would use Tesla’s in-house 4680 battery, which would bring costs way down. BYD, VW and Renault’s success shows that this was the right idea for huge growth. But Musk personally got in the way of that.
Like with the door handles, Musk’s ignorant authoritarian micromanaging of the Cybertruck turned it into a design nightmare, and one of the biggest flops in automotive history. Likewise, his ignorant determination to use the unproven and unreliable proprietary dry-coating tech he bought for the 4680 battery means that even to this day, the 4680 is expensive and unable to scale properly.
Then, yet again, Musk vetoed his own executive’s advice and cancelled the more affordable “Model 2” he had promised for years, explicitly so Tesla could pour more cash into Tesla’s dead-end AI ambitions.
In other words, Tesla’s destroyed market share and rapidly declining sales and revenue can be solely blamed on Musk.
FSD Failure
But, surely, all that extra cash funnelled into Tesla’s Full Self-Driving (FSD) must have paid off? Well, no. Not at all.
At the end of 2024, Musk claimed that by the end of 2025, Tesla would have launched a robotaxi service using FSD that requires no human supervision, and would be available to over 50% of the US population! That simply hasn’t happened because FSD is still wildly unsafe and unable to meet regulatory requirements. In fact, FSD tracker, a site where Tesla customers who bought FSD self-report FSD’s performance, has found that the latest version (V14.2.2) has a critical disengagement rate (how often the driver has to step in to stop the system from crashing the car or driving in a horrifically illegal manner) of every 670 miles on average. In other words, if FSD were used as a properly unsupervised taxi and covered the same daily distance as a normal taxi, it would crash on average once every 3 days. And this is with self-reported data from FSD customers, so it is likely highly biased towards Tesla and cherry-picked. So, no wonder it isn’t safe enough for an unsupervised robotaxi.
Why is FSD so bad? Well, it is because back in 2021, Musk yet again vetoed his own expert engineers and scrapped all the FSD sensors, forcing it to run solely on camera feeds. This removed all redundancy in the system, meaning the computer vision AI and self-driving AI had to achieve near 100% accuracy for FSD to even function vaguely safely in optimal conditions (read more here). Well, we have known for years now that AI has diminishing returns (read more here), which not only means that getting AIs this accurate is simply impossible, but also makes it insanely expensive to even get them even slightly accurate.
So, again, Musk’s hubris, ignorance and arrogance have derailed a core part of Tesla’s business. And, it isn’t like it has drained a potential future business. No, this is badly affecting Tesla now.
Musk once claimed that a Tesla would be an appreciating asset, as self-driving would become a more expensive option as it became more capable. This meant that a $45,000 Tesla bought in 2020 with the $8,000 FSD option would be worth more than $45,000 today, because while the car might only be worth $10,000, the FSD would be worth more than $35,000. This was also meant to be Tesla’s big moneymaker, as if they could sell millions of Teslas with a $35,000 FSD option, then it would dramatically increase their income. Indeed, Tesla did increase the cost of FSD for a while, with it costing $15,000 in 2022. But no one was buying it at that insane price!
In 2024, Tesla slashed the price of FSD in half to get more customers through the door. Instead of costing $199 per month to subscribe, it was $99, and instead of $15,000 to buy outright, it was just $8,000. Tesla even offered free FSD trials to hundreds of thousands, if not millions, of Tesla drivers. Yet, data analysis from YipitData found that in 2024, only 2% of customers who tried FSD on these free trials actually went on to pay for it. In other words, 98% of people who used FSD thought it wasn’t worth the massively discounted $99 monthly price tag. This shouldn’t be surprising, as at the time, Tesla’s own data showed that FSD customers were only using it 15% of the time, heavily suggesting they did not trust or enjoy the system.
In other words, Tesla heavily slashed the price of FSD, destroying the myth that FSD would generate huge income for Tesla, and yet it still didn’t attract a meaningful number of customers.
This problem has persisted for Tesla.
In a recent earnings call, Vaibhav Taneja, Tesla’s CFO, said that “Total paid FSD customer base is still small, around 12% of our current fleet.” That is seriously appalling.
All the data also suggests that this is going to get worse from here. Consumer surveys have repeatedly found that FSD is actively driving customers away. FSD customers are using the system a tiny amount (I estimate they are currently only using it 20% of the time), which heavily suggests a dire lack of trust. People simply do not want to buy or use FSD, and it shows. On that same earnings call, Vaibhav Taneja, Tesla’s CFO, admitted that FSD revenue was down compared to 2024. This all heavily suggests that FSD revenue will likely continue to fall. Keep in mind that Tesla is spending more and more each year to operate and develop FSD, meaning the losses are likely to grow dramatically.
Musk sacrificed Tesla’s sure-fire growth in the EV market to bet the company’s future growth on FSD. Yet FSD isn’t just not growing, but actively dragging Tesla down, because his ignorance and ego ruined the product.
But, it wasn’t like Musk was warned of this… Right?
Well, the executive who advised Musk to focus on affordable EVs, and not self-driving, warned him that even in the best scenario, FSD would not be a profitable venture for Tesla.
So, FSD’s horrific performance and its massive financial failings are both squarely Musk’s fault for ignoring his own experts, who have been proven totally correct.
Robotaxi Failure
But FSD is more than just customer cars, right? Tesla has finally launched its Robotaxi service! Surely, that is going well. Right?
Well, no. Not at all.
Firstly, the service Tesla launched in Austin isn’t a true robotaxi service. A safety driver ready to take over at any time is still required by law, because the system is not safe enough. What’s more, there are currently fewer than 40 of these supervised robotaxis roaming Austin, far, far less than Musk promised. What’s more, only between 5 and 10 of these taxis are operational at any one time, which suggests Tesla has a permit to operate far fewer vehicles than the fleet size suggests. Again, this is likely due to safety issues with FSD.
Tesla isn’t just struggling to expand this service in Austin because of safety issues, but also across the US. For example, Tesla wanted to launch a similar service in San Francisco, but was denied a permit. As such, they are launching a ‘supervised’ robotaxi there, with a driver required to be in the driver’s seat and in control at all times, which is basically the same as if an Uber driver paid for FSD.
Tesla recently conducted its first fully autonomous drive, with no human in the car, on public roads in Austin. However, this was on suspiciously quiet roads while being followed closely by a chaser car, suggesting this was likely a very easy validation test or a thinly veiled PR stunt. Either way, it doesn’t move the needle forward for Tesla at all.
