Business
Ex-Stellantis CEO says Tesla may exit the car industry and may not exist in 10 years
Car executives once saw Tesla as their industry’s biggest disruptor. But now, at least one former automotive CEO says the company may pull out of the car business, and could even cease to exist within 10 years.
Carlos Tavares, who resigned from the top job at Jeep manufacturer Stellantis late last year, said Elon Musk’s Tesla is being hammered by Chinese rival BYD, which surpassed Tesla in global EV sales earlier this year.
Because of this pressure, and with multiple ventures already on his plate, it’s possible CEO Elon Musk may eventually turn his attention elsewhere, said Tavares.
“We can’t rule out that at some point, he’ll decide to leave the automotive industry to refocus on humanoid robots, SpaceX or artificial intelligence,” he told French newspaper Les Echos in an interview. “Elon Musk will have left the automotive industry.”
Tavares went on to say BYD was eating Tesla’s lunch with more efficient and cost-effective vehicles.
“Tesla’s stock market value loss will be colossal because this valuation is simply stratospheric,” he said. “I’m not sure that Tesla will still exist in 10 years. It’s an innovative group, but they’ll be beaten by BYD’s efficiency.”
A spokesperson for Tesla did not immediately respond to a request for comment.
The company surpassed Wall Street expectations Wednesday with revenue of $28 billion up 12% year-over-year, and a 33% deliveries increase in China, its second biggest market.
But over the past five years, Tesla’s market share in China has fallen to about 5% from 16% in 2020, in part because of competition from BYD. Musk himself last year said “Chinese car companies are the most competitive car companies in the world.”
Tesla’s shares were down about 2.5% Friday afternoon and have whipsawed throughout the year. Through March, the company’s shares were down as much as 39%. As of Friday, its stock was up about 8.6% year-to-date.
Tavares’ comments come as the EV maker tries to hang on to its superstar CEO. Musk spent much of the last year aiding President Donald Trump as a leader of the Department of Government Efficiency. At the time, he told Fox News, he was balancing his responsibilities “with great difficulty.”
Meanwhile, Tesla has faced setbacks in its supply chain due in part to Trump’s tariffs and pressure on sales thanks to the elimination of the EV tax credit in the U.S.
The company has repeatedly said it needs to retain and incentivize Musk to accomplish its long-term goals. A 10-year, $1 trillion pay package for the CEO, set for a shareholder vote on Nov. 6, is meant to do just that—while also setting lofty goals such as boosting the company’s market capitalization by 500% to $8.5 trillion.
Two proxy advisory firms earlier this month recommended shareholders vote against the pay package, in part because they claim the board has too much leeway in deciding when and how Musk has met the defined goals. Tesla’s board denies this claim.
“This award aims to see Tesla grow larger than any company in history. Each and every operational milestone, including the product goals, must be validated by an extraordinarily ambitious – and sustained – increase in market capitalization,” Tesla board chair Chair Robyn Denholm said in a statement.
