According to the technology media The Information, Musk seems to have lost interest in the electric vehicle business, refusing to launch the highly anticipated $25,000 economy crossover SUV (Model 2), and instead betting everything on AI products such as autonomous Robotaxi and humanoid robots.The report stated that Musk decided as early as the beginning of last year that Tesla would no longer be an electric vehicle company. In Musk's view, the main goal of promoting the electric vehicle industry has been achieved. What remains are mostly trivial matters, such as launching new models and catering to the sentiments of Wall Street analysts.Musk rejected the executives' suggestion to continue developing the $25,000 economy crossover SUV and instead focused entirely on AI products such as autonomous Robotaxi and humanoid robots. This decision not only ignored the internal market analysis unfavorable to Robotaxi but also led to the departure of three senior executives.As Tesla transitions to an AI company, it faces negative factors such as declining sales and brand crises, causing Tesla's stock price to drop nearly 50% since its peak in December last year.Considering Tesla's high valuation, if sales do not rebound, it may decline further.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8c363884-550e-492e-bcfc-51570dc14ec7.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8c363884-550e-492e-bcfc-51570dc14ec7.png"/>Investors now face the question of whether to believe Musk's AI vision can compensate for or even exceed the losses caused by the slowdown in the electric vehicle business, and all of this depends on whether Robotaxi can achieve Musk's ambitious expectations.<h2>Internal Analysis Shows Grim Prospects for Robotaxi</h2>An internal, undisclosed analysis report from Tesla raises serious doubts about the prospects of Robotaxi.This driverless electric vehicle, which has no steering wheel, no pedals, and no rearview mirrors, is seen by Musk as potentially selling millions of units and generating huge profits.However, internal analysis shows that the number of Robotaxi sold to individuals and used for shared mobility may only be in the hundreds of thousands, and this model may never be profitable.Analysts calculated that as Robotaxi becomes more popular, the U.S. automotive market could shrink from 15 million vehicles per year to about 3 million, as the usage time of driverless vehicles is five times that of private cars.However, after excluding rural residents, suburban families with children, and active groups that often carry large equipment, the expected annual sales of Robotaxi are far below 1 million units.More critically, a significant portion of the 633,700 electric vehicles Tesla is expected to sell in the U.S. in 2024 may not be replaceable by Robotaxi.Analysts expect Tesla's market share to further shrink under competition from Waymo and other startups.<h2>Executive Rebellion and the &#34;Death of Model 2&#34;</h2>In the last week of February 2024, after two years of repeated debates about Model 2, Musk held an important meeting at Tesla's Palo Alto office, which was the last opportunity for a debate on the $25,000 modelTesla's senior management team strongly supports the simultaneous production of Model 2 and RoboTaxi, believing that this affordable electric vehicle could sell millions of units annually and fund Musk's AI ambitions.As opposition mounted and the atmosphere became tense, Musk's staunch supporter Omead Afshar even asked, &#34;Is this a rebellion?&#34;Ultimately, Musk made the decision: The Model 2 project is completely terminated, and Tesla will transform into an AI company.&#34;At the end of the day, I think Elon is just not interested in making cars like the Volkswagen Golf,&#34; said a person familiar with the situation, &#34;His attitude is 'let others do it.'&#34;Just six weeks after that meeting, three executives who had defended the Model 2 suddenly left: Senior Vice President of Powertrain Drew Baglino, Vice President of Global Public Policy and Business Development Rohan Patel, and Vehicle Program Director Daniel Ho. Patel stated:<blockquote>&#34;We have a lot of models showing that the returns on Full Self-Driving (FSD) and Robotaxi will be slow, and it will be volatile. Outside the U.S., given the strict regulatory environment or lack of regulatory environment, it will be very, very difficult.&#34;</blockquote><h2>Transformation Pain Points: Declining Sales and Brand Crisis</h2>Musk's decision has left the company facing the issue of aging models, with declining sales beginning to show.From 2019 to 2023, Tesla's sales grew at an average annual rate of 50%, but last year it fell by 1%. In the first quarter of this year, the decline exceeded 13%, with multiple analysts predicting that Tesla's delivery volume will shrink again this year.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9fa81a9a-55a3-48d3-bb9d-472de1078776.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9fa81a9a-55a3-48d3-bb9d-472de1078776.png"/>Musk's political activities have also put further pressure on the company. He invested $277 million in Trump's presidential campaign and amplified controversial and often false statements using the X platform.This seems to have severely damaged Tesla's brand in the U.S. and Europe, leading to a collapse in demand in places like Germany and even incidents of attacks on Tesla vehicles and dealerships.Wedbush Securities analyst Daniel Ives stated in a report to clients on April 6:<blockquote>Musk's work in Washington has created a &#34;brand crisis tornado, which has now turned into an F5 tornado,&#34; causing permanent damage to Tesla</blockquote>

TSLA

According to reports, in Musk's view, his main goal of promoting the electric vehicle industry has been achieved. What remains are mostly more trivial matters, such as launching new models and catering to the sentiments of Wall Street analysts

- Elon Musk has shifted Tesla's focus from electric vehicles to AI products, abandoning the anticipated $25,000 Model 2 SUV in favor of autonomous Robotaxi and humanoid robots.  
- This decision has led to significant internal dissent, resulting in the departure of three senior executives and a nearly 50% drop in Tesla's stock since December 2023, amid declining sales and a brand crisis.  
- Analysts express skepticism about the Robotaxi's market potential, predicting that sales may fall short of expectations, further challenging Tesla's market position against competitors.

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Tesla

Alphabet

Is Musk losing interest in electric vehicles? Internal doubts at Tesla about the bleak prospects of RoboTaxi, hopes for a cheaper Model 2, while Musk remains indifferent