A version of this story appeared in CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free here.
New York
CNN
—
Elon Musk has two key strengths: a bottomless well of money and an unmatched ability to hypnotize Wall Street with promises of a whizz-bang technological future. He’s starting to run into the limits of both.
On the hypnosis front, Musk is busy hyping the tentative launch on June 22 of Tesla’s long-awaited robotaxi pilot program in Austin, Texas. Tentative, Musk said, because the company is being “super paranoid about safety.”
When even Musk says the date is iffy, do not hold your breath. The guy can deliver a game-changing EV, to be sure, but many of his more ambitious projects are notoriously behind schedule.
For more than half a decade, the Tesla CEO has been promising that his robotaxi service — a fleet of driverless cars shuttling customers around — was just a year away, as my colleague Chris Isidore notes. (Musk has a well established history of wildly overpromising and underdelivering, which even he admits.)
In the meantime, Alphabet went ahead and began a taxi service using driverless Waymo cars in 2020, and now provides 250,000 paid rides a week in San Francisco, LA, Phoenix and Austin. (It is still a money-losing operation, sure, but the losses are essentially a rounding error for the tech behemoth.)
If playing catch-up on robotaxis were Tesla’s only problem, that’d still be a tall order. But the company is trying to usher in the future of transportation at the same time it is doing damage control on its reputation.
What began as a kind of aspirational luxury car brand popular among well-to-do liberals has, for many, become synonymous with its erratic, authoritarian-adjacent CEO. Musk’s MAGA turn wasn’t the only reason Tesla sales started tanking globally, but it certainly didn’t help.
Chinese competitors have been eating Tesla’s lunch in key markets around the world. The Cybertruck is — relative to Musk’s original high-flying predictions — a flop, and the rest of the company’s lineup is dated. Some disappointed drivers say they can’t offload their Teslas because demand and resale prices have fallen so dramatically.
In sum: Tesla, whose stock (TSLA) has tumbled 30% since its all-time high in December, needs its robotaxi event, whenever it happens, to really knock investors’ socks off.
Of course, in the past, Musk has been known to lean into the flash and somewhat gloss over the substance. Last fall, Tesla shares fell 9% the day after its “Cybercab” unveiling, which offered few details about how Tesla plans to improve its still-unfinished “Full Self-Driving” tech and featured robot staff that, unbeknownst to people who attended, were being operated remotely by humans.
The Austin event will be a “proof of concept exercise, not a rollout or a testing of a commercial asset for sale,” GLJ Research analyst and prominent Tesla critic Gordon Johnson said in a note this week.
Part of the Musk mystique has to do with just how unfathomably rich he is — like, how could he possibly fail with all that wealth?
And to be sure, Musk’s money affords him a boundless budget to buy just about anything and sue just about anyone, in perpetuity. But Musk’s foray into politics has shown that even Muskian wealth has its limits when Elon Musk is involved.
For example, Musk dropped nearly $300 million on campaign spending for Donald Trump and other Republicans last year, only to blow up his relationship with the president a few months later with a series of outbursts on social media. He shelled out $44 billion on Twitter with the intent of building it into some kind of “everything app” — an internet hub for commerce and a global town hall. The platform saw an exodus of users and advertisers as Musk took down speech guardrails, and it now more closely resembles the notorious message board 4chan.
Musk’s $20 million gamble on a conservative candidate for the Wisconsin Supreme Court was seen as a test of his newfound political power. But that one also backfired, putting Musk and his unpopular DOGE layoffs at the center of the narrative and enabling the liberal candidate to secure a 10-point victory.
Bottom line: After torching Tesla’s brand with his MAGA turn, Musk went and did something even more unthinkable and turned on Trump, straining (if not dooming) his status as “first buddy.” Musk is now in damage control mode, and he’s reviving an old playbook, revving up the self-driving hype machine, for a bit of redemption.
“He’s got a problem,” President Trump told CNN’s Dana Bash last week. “The poor guy’s got a problem.”
