For years, even to its most ardent critics, the mission at Tesla seemed pretty clear: advance clean energy through electric vehicles and their related ecosystems, while eventually building up to a day when cars could fully drive themselves. The last part is why the company is valued so highly, more like a tech company than the car companies usually poorly regarded by Wall Street, and investors and longtime fans alike gave CEO Elon Musk’s many… idiosyncrasies (let’s  go with that) a pass for all the value he delivered. But in 2024, the stock price is down, doubts about its ability to deliver on AI are mounting and even Musk seems to have changed his tune on the urgency of confronting climate change. 

What’s even happening at Tesla these days? That kicks off this Monday edition of Critical Materials, our morning industry news roundup. Also on deck today: Waymo gets torched, literally in this case, and if you want a company where cracks are really starting to show, look at Nissan. Let’s dig in. 

30%: Tesla’s Direction Gets New Questions From Investors, Fans Alike

Let me start with a few caveats. First, I don’t think it’s wise to underestimate Tesla, ever. Even with an aging lineup of cars (sans Cybertruck, which has its own challenges) it’s still far ahead of most other competitors in EVs, software and batteries. And it’s in the middle of a stock price slump in part because it’s scaling up to build a potentially game-changing cheap EV, something I think it’s uniquely positioned to do. Unlike a lot of Wall Street types who want immediate, endless returns, I think that’s an understandable and necessary ramp-up.

But there are bigger questions to be asked now about Tesla’s direction, and as always, they are inextricably tied to Musk. This comes from Wall Street Journal reporter Tim Higgins (who authored my favorite book on Tesla to date) asking what the company’s all about these days. Emphasis mine below:

But lately, Musk sounds less urgent about climate change. And last month, Musk threw investors a curveball. That bright AI future he has talked about for so long? Well, he doesn’t feel comfortable doing it at Tesla after all—unless he gets another giant payday that gives him more control. 

Such threats immediately raise an existential question for Tesla investors: What makes the company special in a world where Musk doesn’t see climate change as a near-term risk and is wavering on his commitment to pursue AI at Tesla?

Shares of Tesla, which have already valued the company well beyond any other mere carmaker, have fallen more than 20% this year through Friday while other tech giants, such as Microsoft and Nvidia, have seen huge gains fueled by excitement around their work in AI. 

Tesla has long chased full autonomy—though it has yet to deliver there, certainly—but just recently it’s positioned itself as this AI company. But the promises tend to work fine when the stock price is super high; lately, that has not been the case. Its market cap losses have totaled those of entire car companies this year.

And Musk has shocked many longtime fans by downplaying the risk of climate change in the near term as he rails against environmental, social and governance (ESG) initiatives on X, the social media platform that commands so much of his attention now. 

But as always, the big promises are just around the corner: 

That future, in Musk’s telling, involves humanoid robots, dubbed Optimus, that he says Tesla is working to develop, using the technology behind its driverless cars. 

“Optimus, obviously, is a very new product, an extremely revolutionary product and something that I think has the potential to far exceed the value of everything else at Tesla combined,” Musk told analysts in January. 

“I think,” he added, “we’ve got a good chance of shipping some number of Optimus units next year.”

What is Tesla all about these days, especially as auto industry competitors settle in for the long haul in the EV race?

60%: Please Do Not Torch The Waymo Robotaxis

 

Rough weekend for San Francisco. First, it loses the Super Bowl in overtime to Taylor Swift’s boyfriend, and now it’s back in the news again seeming like a hive of chaos and injustice after some revelers torched one of Google’s Waymo robotaxis.

As we’ve covered on InsideEVs before, robotaxis do not have a lot of positive public sentiment behind them in the tech-driven city where they’ve seen the most deployments. Last year, several high-profile incidents led General Motors’ Cruise division to hit pause entirely and lose its founding CEO. 

Waymo has fared much better here (and in my personal experience, does seem to be a safer and more advanced experience than what Cruise offered) but it’s not been perfect either. Here’s CNBC on the incident:

Last week, a driverless Waymo car collided with a cyclist in San Francisco, causing minor injuries and the incident is being reviewed by the state’s auto regulator.

This is not the first time people have attacked a self-driving car, but the severity of the incident may illustrate growing public hostility toward self-driving cars following a pedestrian-dragging accident last year involving a self-driving vehicle operated by General Motors’ Cruise unit.

Waymo said that around 9 p.m. local time on Saturday (0500 GMT Sunday), someone in a crowd broke a car window and threw a firework inside, setting the vehicle ablaze. Waymo did not say what caused the crowd to attack the car.

Video footage on social media showed the electric vehicle burning, sending up a huge plume of black smoke.

Luckily, “the vehicle was not transporting any riders and no injuries have been reported,” fire officials said. However, any day where they have to put out a battery fire is a bad day at work. 

90%: Nissan Suffers Biggest Stock Price Plunge In Two Decades

But if you want to look at a car company that’s having some real headaches, look at Nissan. It’s no longer the EV leader it once was, it just took a $1.8 billion market value hit because it’s losing in China so badly, and its U.S. lineup lacks any of the hybrid cars that Americans bought in force last year. Instead, they’re being asked to buy the Ariya electric crossover, but without any tax credits here it’s a tough proposition. 

Here’s Automotive News on some of Nissan’s woes:

But now the market has shifted and Nissan’s strategy is starting to lose traction. The new, harsher reality began dinging profits in Nissan’s fiscal third quarter that ended Dec. 31.

Soaring demand for affordable nameplates has put Nissan back to selling the entry cars that once gave it a budget-brand image. And Nissan’s lack of hybrid vehicles means it can’t capture a growing segment of customers who want an affordable alternative to full electrics.

Correcting course, Japan’s No. 3 automaker now says it will reexamine its hybrid road map for the U.S., including how it might be able to offer its e-Power hybrid system there and elsewhere.

“The high interest rate inflation is hampering affordability for the customer,” CFO Stephen Ma said Thursday while announcing financial results for the fiscal third quarter. “So, we are focused on making sure we bring the right vehicles, in the right segments to customers.”

[…]  Nissan’s e-Power series hybrid technology is popular in Japan and Europe, where it is installed in such vehicles as the hot-selling Rogue crossover. But the system has yet to land in the U.S.

Nissan as a company has yet to fully recover from the chaos around the ouster and prosecution of former megaboss Carlos Ghosn—something that was less like executive turnover at the company and more like a top-to-bottom coup d’etat and talent exodus. Now, it’s worth asking: what even is Nissan anymore? What does it bring to the table in such a crowded, rapidly evolving auto market? 

100%: What’s Your Prescription For Nissan?

We do plenty of Tesla tea leaf-reading around here, so for now, let’s turn to Nissan. How would you put it on a path to long-term survival and success?