Elon Musk Makes Shock Claim After Tesla's 70% Profit Plunge: What's Next for the EV Giant?

 

Tesla Inc., the world’s most influential electric vehicle (EV) manufacturer, has found itself under an unaccustomed cloud of doubt after reporting a jaw-dropping 70% drop in quarterly profits. Investors and analysts were stunned by the scale of the decline, but it was Elon Musk’s reaction—and his subsequent bold claims—that truly sent shockwaves through the automotive and tech industries.

A Rocky Quarter for Tesla

The latest earnings report revealed that Tesla’s net income plummeted from $3.7 billion a year earlier to just over $1.1 billion this quarter. While many expected a slowdown amid global economic turbulence and increasing competition in the EV market, few anticipated such a dramatic downturn.

Several factors contributed to the slump. High raw material costs, intense price competition—especially from Chinese EV makers like BYD—and production challenges in Germany and Texas combined to squeeze Tesla’s margins. Additionally, consumer demand in key markets showed signs of fatigue, raising questions about whether Tesla's meteoric rise can be sustained without significant strategic shifts.

Musk’s Reaction: A Surprising Pivot

In the wake of the earnings announcement, Elon Musk, known for his unpredictable and often provocative public statements, took to X (formerly Twitter) to address the news. He began with a characteristic dose of candor: "Not our best quarter, but challenges fuel innovation."

However, what followed caught many off guard. Musk claimed that Tesla is on the verge of a “historic pivot,” one that could redefine the company’s future beyond cars.

“We are no longer just an automaker,” Musk asserted during the earnings call. “The foundation we’ve built with Tesla AI and robotics will soon outshine our vehicle business. I expect Tesla’s robotaxi platform and Optimus robot to become our main growth drivers within the next few years.”

The Robotaxi Revolution

Musk’s comments reignited speculation about Tesla’s long-promised robotaxi fleet. Tesla has teased the idea of fully autonomous, self-driving taxis since 2016, but repeated delays and regulatory hurdles have kept the vision just out of reach. Despite skepticism, Musk claimed that Tesla is on track to unveil its first operational robotaxi by the end of next year.

“We’ve made breakthroughs in Full Self-Driving (FSD) software and hardware that are not public yet,” Musk said. “Robotaxis will disrupt not only the auto industry but the entire concept of urban mobility.”

He also hinted at an upcoming “AI Day 3” where more concrete details about the robotaxi roadmap—and the FSD’s next major update—will be unveiled.

Optimus: Tesla’s Secret Weapon?

Even more startling than the robotaxi claim was Musk’s renewed focus on Optimus, Tesla’s humanoid robot. First introduced in prototype form in 2021, Optimus has often been dismissed by critics as a sideshow or a distraction from Tesla’s core business. But Musk doubled down, calling Optimus “potentially the most important product Tesla is developing.”

Musk stated that recent advancements in robotics and artificial intelligence have accelerated Optimus’ timeline. According to him, Tesla could begin limited production of Optimus units for internal use as soon as 2026, with commercial sales starting shortly after.

“Our factories will be the first testing ground,” Musk said. “We’re talking about a future where millions of humanoid robots work alongside humans, transforming industries like manufacturing, logistics, and even home care.”

Skepticism and Market Response

Despite Musk’s bullish outlook, Wall Street’s response has been mixed. Tesla’s stock initially fell by 8% after the profit report, reflecting investor unease about the company’s short-term prospects. Several analysts expressed concerns that Musk’s ambitious AI and robotics plans might be diverting focus from Tesla’s core EV business at a critical moment.

“Tesla is trying to change the narrative with these futuristic promises, but right now, the numbers tell a worrying story,” said Dan Ives, an analyst at Wedbush Securities. “The EV market is more competitive than ever, and Tesla can’t afford to lose ground while betting on long-term projects that are still unproven.”

Others were more optimistic, seeing Musk’s claims as a natural extension of Tesla’s culture of innovation.

“Love him or hate him, Musk has a track record of making the impossible happen,” noted Cathie Wood, CEO of ARK Invest. “If Tesla pulls off even part of what Musk is talking about, it will redefine what we think of as an automotive company.”

A Crossroads Moment

For Tesla, this appears to be a defining moment. The company has enjoyed an extraordinary run of success over the past decade, transforming from a niche EV maker into one of the world’s most valuable companies. But with mounting challenges—including rising interest rates, supply chain pressures, and fierce competition—Tesla faces questions about how it will sustain growth and profitability in the years ahead.

Musk’s vision of Tesla as an AI and robotics powerhouse is compelling, but it also represents a significant gamble. The path to full autonomy and advanced robotics is riddled with technical, regulatory, and societal obstacles. Whether Tesla can navigate these and deliver on Musk’s bold promises remains to be seen.

The Road Ahead

In the meantime, Tesla is taking steps to shore up its core business. Musk announced price adjustments aimed at stabilizing demand and hinted at new battery innovations that could lower production costs. He also confirmed that the much-anticipated Cybertruck is still on track for initial deliveries later this year, albeit in limited quantities.

“We’ve faced challenges before and come out stronger,” Musk concluded on the earnings call. “This time will be no different.”

As the dust settles, one thing is clear: Tesla’s journey is far from over, and if Musk’s latest claims are any indication, the next chapter could be its most transformative yet.