As Tesla prepares for its third-quarter earnings call on Wednesday, retail investors are demanding clarity on the company’s long-promised $25,000 affordable electric vehicle, even as CEO Elon Musk continues to emphasize Tesla’s identity as an AI and autonomy company. The top-voted question on Tesla’s anonymous investor Q&A forum, representing holders of approximately 2.2 million Tesla shares, asks whether the company remains on track to deliver the affordable model next year and how it aligns with Tesla’s AI and product roadmap.
The investor focus on the budget EV comes amid mounting uncertainty about the vehicle’s future. Musk told investors in April that Tesla was accelerating plans to build cheaper cars, denying reports that the company had scrapped the so-called “Model 2.” He suggested production could begin in early 2025, but Tesla has provided minimal updates since then. Notably, the affordable EV was conspicuously absent from Musk’s recent robotaxi unveiling event in Los Angeles, where he introduced the “Cybercab” autonomous vehicle.
The robotaxi presentation disappointed Wall Street analysts, leading to a decline in Tesla’s stock price as the event failed to meet expectations. Instead of focusing on near-term vehicle production, Musk has been promoting Tesla’s AI-driven products, including the robotaxi and the company’s Optimus humanoid robot. The billionaire has repeatedly emphasized his vision of Tesla as an AI and autonomy business rather than a traditional automotive manufacturer.
However, the reality remains that Tesla is still predominantly a car company, with the vast majority of its revenues derived from electric vehicle sales. This creates tension between Musk’s AI-focused vision and investor demands for competitive, affordable vehicles. The urgency is heightened by Tesla’s eroding market share in the US electric vehicle market, as competitors introduce cheaper alternatives.
The competitive pressure is particularly intense from Chinese EV manufacturers. BYD, which briefly surpassed Tesla as the world’s largest EV producer in 2023, now sells electric vehicles for less than $10,000 in China. Multiple Chinese EV startups have launched models that significantly undercut Tesla’s pricing, threatening the company’s global position.
Other investor questions addressed the Tesla Semi truck, extended waiting times at service centers, and the repeatedly delayed Roadster, which was announced six years ago but has yet to materialize. Tesla did not immediately respond to requests for comment on these investor concerns.
Key Quotes
Is Tesla still on track to deliver the more affordable model next year, as mentioned by Elon earlier, and how does it align with your AI and product roadmap?
This was the top-voted question from retail investors on Tesla’s Q&A platform, representing nearly 5,000 votes from holders of approximately 2.2 million Tesla shares. It reveals investor concern about connecting Tesla’s AI ambitions with practical vehicle production plans.
The billionaire has been clear that he regards Tesla as an AI and autonomy business rather than an automotive enterprise.
This statement captures Elon Musk’s strategic vision for Tesla, emphasizing his focus on artificial intelligence and autonomous technology over traditional car manufacturing, despite the company’s current revenue reality.
But Tesla is very much still a car company, with the vast majority of its revenues coming from EV sales.
This observation highlights the fundamental disconnect between Musk’s AI-focused vision and Tesla’s actual business model, underscoring why investors are pressing for clarity on affordable vehicle plans rather than robotaxi promises.
Our Take
Tesla’s situation exemplifies a growing challenge in the AI industry: balancing visionary AI projects with immediate business imperatives. Musk’s robotaxi and Optimus robot represent ambitious AI applications, but they’re years from meaningful revenue generation. Meanwhile, Tesla faces existential competitive threats from companies executing on today’s technology. This mirrors broader patterns where AI hype can distract from core business execution. The investor pushback suggests that markets are becoming more skeptical of AI promises without clear commercialization paths. For Tesla specifically, the company may need to prove it can walk and chew gum simultaneously—delivering affordable EVs while developing AI capabilities. The Chinese competition, offering $10,000 EVs, demonstrates that practical execution often trumps technological ambition in winning markets. Tesla’s earnings call will reveal whether management can reconcile these competing priorities or if the AI-versus-automotive tension will continue to create strategic confusion.
Why This Matters
This story highlights a critical tension in Tesla’s strategic direction that has significant implications for the AI industry and automotive sector. While Musk positions Tesla as an AI company focused on autonomy and robotics, investors and market realities demand competitive traditional vehicles. This disconnect reveals broader questions about AI commercialization timelines versus immediate business needs.
The story matters because it demonstrates how AI ambitions can conflict with core business fundamentals. Tesla’s focus on robotaxis and humanoid robots represents long-term AI bets, but the company faces immediate competitive threats from manufacturers offering affordable EVs today. This tension between AI innovation and market execution is relevant across the tech industry.
For the AI sector specifically, Tesla’s robotaxi struggles suggest that autonomous vehicle technology may take longer to monetize than anticipated. Meanwhile, competitors are winning market share with conventional vehicles, potentially limiting Tesla’s resources for AI development. The outcome will influence how other companies balance transformative AI projects against incremental product improvements and whether AI-first strategies can sustain businesses facing traditional competition.
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