Car executives once saw Tesla as their industry’s biggest disrupter. 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,” Tavares 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’s comments come as the EV maker tries to hang on to its superstar CEO. Musk spent much of the past 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, owing 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.
