The Tesla (TSLA) dilemma: company is cooked with Musk, but stock crashes without him
Tesla currently finds itself in quite a dilemma: the company’s core business is in free fall, with Elon Musk at the helm.
However, now that Tesla’s stock is firmly in the “meme stock” category, it would likely crash without him pumping it.
Nothing can prove that Tesla is a meme stock that trades on vibes more than the stock going up 20% this week after it reported its worst earnings in years and came in way below expectations.
Tesla’s earnings trends point to a company in a difficult situation:
Tesla’s vehicle deliveries have been declining since 2024, along with its automotive gross margins, despite a rise in EV sales globally.
Last quarter, Tesla would have lost money if it weren’t for the sale of regulatory credits, despite energy storage sales surging.
Energy storage is Tesla’s only silver lining. Still, the company has warned that it could become problematic since it relies on inexpensive Chinese battery cells, which are now subject to tariffs. Furthermore, the competition is intensifying with companies like CATL and BYD, which supply battery cells to Tesla’s energy storage products, having launched competing products.
With Tesla’s EV sales dropping, in part due to Musk alienating half of Tesla’s customer base, and in part due to his leadership pushing for autonomous driving rather than a more diverse vehicle lineup, the automaker is in clear need of new leadership.
Musk is becoming too political and controversial to be the face of a consumer product company, and he is splitting his time with six different projects, making significant mistakes in the process.
Under Musk, Tesla has launched a single new vehicle in the last 5 years, the Cybertruck, and it has been a total commercial flop. He has been consistently wrong about when Tesla would solve self-driving for the last 10 years. Most CEOs would have been fired by now.
At this point, it is difficult to argue that Tesla’s business would not benefit from new leadership.
However, there is one aspect of Tesla that would not benefit from Musk leaving: Tesla’s stock. It currently trades at an insane 165 price-to-earnings ratio amid declining earnings.
That’s unheard of in the auto industry, and it is also extremely rare in the tech industry, in which Musk attempts to position Tesla to justify such a high P/E even though most of its earnings are still tied to selling cars.
The only reason Tesla is currently able to maintain this is the fact that there are a surprising number of people who believe Musk when he says that Tesla is on the verge of solving “real-world AI”, which refers to self-driving vehicles and humanoid robots.
That’s it.
Tesla’s stock price has basically become an index of how much investors trust Musk’s claims about Tesla’s self-driving and robotic efforts – because no one can argue that it has anything to do with Tesla’s core business and fundamentals since those are in free fall and would justify Tesla trading at about a fifth of its current valuation.
Therefore, the stock price relies on people believing that Musk, who has been consistently wrong about Tesla solving self-driving and never releasing any data to prove otherwise, is right this time about Tesla being on the verge of solving the problem and ahead of the competition.
If Musk leaves, those people would likely take the stock with them, resulting in a potential crash.
Electrek’s Take
That’s quite the conundrum.. for some. For me, you save the business and not the stock. The stock will eventually come down at some point anyway. The business of selling millions of EVs is actually good for the world and employs about 100,000 people.
Musk has been able to keep things going for a long time, to his credit, with the hope that Tesla will eventually catch up to his hype, but it looks like the most likely outcome is that he can only keep things going until other companies start to scale their autonomous driving efforts.
Waymo is already completing 250,000 autonomous rides per week in the US. Musk has been able to make his cult ignore that by claiming that it’s not scalable, even though those weekly rides have more than doubled in the last year.
In China, Baidu, WeRide, PonyAI, and others are already becoming mainstream.
As those efforts become more popular and the number of people who use them regularly reaches the millions, it will become harder for Musk to present Tesla as a leader in autonomy while carrying a decade of missed deadlines.
I think Tesla has a real shot at solving general autonomy, but I believe it will happen closer to 2027-2028, with a new hardware suite. By that time, Tesla will have plenty of established competition, in addition to Waymo, and it will carry the significant liability of having promised self-driving capabilities on millions of HW3-4 vehicles that it cannot deliver.
This is not a great situation, and it’s entirely because of Musk.
However, he has his position at Tesla secured. Even Tesla shareholders who have serious doubts about Tesla’s self-driving efforts don’t want to oust him on the off-chance that he might be right. This points to most of Tesla’s value currently lies in the mystique of Musk being a “super genius.”
You often see it on social media. When someone criticizes Musk or Tesla, instead of providing a counterargument to the criticism, Musk fans will simply attack the messenger and ask: “Who are you to question Musk? How many rockets have you landed?”
This is cult behavior. You can’t question the leader. It’s a perilous situation that rarely has a happy outcome.
Musk is smart, and his companies have achieved incredible things under his leadership, but that doesn’t mean he is a super genius who can’t make mistakes.
He has been wrong many times and has lied on numerous occasions. He has proven himself willing to lie and mislead people for his own benefit. That’s not someone you should put your trust in. People, especially in the US, tends to assign a ton of value to someone who has amassed wealth.
I am not someone who automatically thinks someone is bad because they are a billionaire. However, I also know that if you are somewhat intelligent, connected to wealthy individuals, and have low morals, it is fairly easy to accumulate wealth. I think Musk fits this category with a messiah complex on top of it.
I am curious to know if anyone sees a way out of this conundrum for Tesla at this point. As a fan of Tesla’s original mission to accelerate the advancement of electric transportation, I believe Tesla can still contribute to that goal, but not with Musk at the helm.
Yet, the only people who can kick Musk out are Tesla shareholders, and as described above, they are incentivized not to push him out because it would likely lead to a significant decline in Tesla’s stock price.
What can be done? I’ll hang out in the comments to see if you have ideas.
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Lucid’s electric minivan can outsprint the Chevy Corvette Z06, and it has more interior space than a Ford Explorer. Is the Lucid Gravity really the “ultimate uncompromising SUV?”
Lucid Gravity SUV is faster than a Corvette Z06
Lucid’s electric SUV is impressive inside and out. The Gravity provides up to 450 miles of driving range, ultra-fast charging (200 miles in under 11 mins), and it even offers up to 120 cubic feet of cargo space. That’s more than the Ford Explorer (87.8 cu ft).
It’s also faster than most sports cars. The Grand Touring trim has up to 845 hp, good for a 0 to 60 mph sprint in just 3.4 seconds, but the Dream Edition takes it to another level.
Powered by dual electric motors, the Lucid Gravity Dream Edition boasts 1,070 hp. To see how Lucid’s minivan stacks up against the competition, Car and Driver nabbed one for testing.
On the test track, the Lucid’s minivan covered a quarter-mile in just 10.6 secs, beating a Chevrolet Corvette Z06 to 150 mph by nearly three seconds.
According to Car and Driver, the Gravity didn’t just impress in the quarter-mile, “it was a beast in every acceleration metric.” Lucid’s SUV hit 30 mph in 1.4 seconds, 70 mph in 3.7 secs, and topped 100 mph in just 5.9 seconds.
Dave Vanderwerp, the testing director who took the Gravity for a spin, said the electric SUV “gets a sort of second wave of thrust starting around 60 mph.”
With a quarter-mile of just 10.6 secs, Lucid’s Gravity is the fastest SUV they have ever tested, beating out the Rivian Tri-Motor Max (11.1 secs), BMW iX M60 (11.5 secs), and Mercedes-AMG EQE53 SUV.
Although the Rivian’s 850 hp R1S Tri-Motor beat the Gravity to 60 mph, Lucid’s SUV sprinted ahead in the quarter-mile, traveling nearly 20 mph faster.
It was also faster than gas-powered super SUVs, including the Lamborghini Urus Performante (11.2 secs) and Porsche Cayenne Turbo GT (11.2 secs). However, they have yet to test a Tesla Model X Plaid, so that could change the game.
In what it called the “1,000 hp mom missiles” drag race, Hagerty recently pitted the Gravity Dream Edition against the Audi RS Q8 Performance, Range Rover Sport SV, Porsche Macan Turbo Electric, Rivian R1S Quad, and Porsche Panamera Turbo S E-Hybrid.
The result was a three-way tie between Lucid’s Gravity, the Porsche Panamera Turbo, and Rivian R1S Quad hitting the quarter-mile in 10.5 seconds.
The Lucid Gravity is available to order starting at $94,900 in the US. Later this year, Lucid is launching the lower-priced Touring trim, priced from $79,900.
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Solar provided over 11% of total US electrical generation in May, while wind + solar produced over one-fifth, and the mix of all renewable energy sources generated nearly 30%, according to data just released by the US Energy Information Administration (EIA).
Solar continues to set new records
Solar continues to be the fastest-growing source of US electricity, according to EIA’s latest “Electric Power Monthly” report (with data through May 31, 2025), which the SUN DAY Campaign reviewed.
In May alone, electrical generation by utility-scale solar (>1-megawatt (MW)) increased by 33.3% year-over-year, while “estimated” small-scale (e.g., rooftop) solar PV increased by 8.9%. Combined, they grew by 26.4% and provided over 11% of US electrical output during the month.
For the first time ever, the mix of utility-scale and small-scale solar produced more electricity than wind: solar – 38,965 gigawatt-hours (GWh); wind – 36,907-GWh.
Moreover, utility-scale solar thermal and photovoltaic expanded by 39.8% while that from small-scale systems rose by 10.7% during the first five months of 2025 compared to the same period in 2024. The combination of utility-scale and small-scale solar increased by 31.1% and was nearly 8.4% of total US electrical generation for January to May – up from 6.6% a year earlier.
Solar-generated electricity easily surpassed the output of US hydropower plants (6.1%). Solar now produces more electricity than hydropower, biomass, and geothermal combined.
Wind is also on the rise in 2025
Wind produced 12.2% of US electricity in the first five months of 2025. Its output was 3.9% greater than the year before, almost double that produced by hydropower.
During the first five months of 2025, electrical generation by wind + utility-scale and small-scale solar provided 20.5% of the US total, up from 18.7% during the first five months of 2024. Solar + wind accounted for nearly 21.5% of US electrical output in May alone.
During the first five months of this year, wind and solar provided 26.2% more electricity than coal, and 15.4% more than US nuclear power plants. In May alone, the disparity increased further when solar + wind outproduced coal and nuclear power by 55.7% and 22.1%, respectively.
All renewables produced almost 30% in May
The mix of all renewables – wind, solar, hydropower, biomass, geothermal – produced 9.7% more electricity in January to May than they did a year ago (7.6% more in May alone) and provided 28.1% of total US electricity production compared to 26.5% 12 months earlier.
Electrical generation by all renewables in May alone provided 29.7% of total US electrical generation. Renewables’ share of electrical generation is now second only to that of natural gas, whose electrical output actually dropped by 5.9% during the month.
“Solar and wind continue to grow, set new records, and outproduce both coal and nuclear power,” said Ken Bossong, the SUN DAY Campaign’s executive director. “Consequently, the ongoing Republican assault against renewables is not only misguided and illogical but also a good example of shooting oneself in the foot.”
Read more: FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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Environment
Podcast: Tesla’s disturbing earnings, self-driving challenge, solid state batteries, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Tesla’s disturbing earnings, a new self-driving challenge, solid-state batteries, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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