Tesla and the promise of Radiant Tomorrows

Jorge Costa Oliveira

Tesla’s price-to-earnings (P/E) ratio currently stands at around 283.5 (380, according to Gemini, and 400, according to MarketWatch) – far higher than that of other major tech companies: Nvidia (69), Amazon (61.5), Microsoft (37.5), Meta (33.7), Apple (28), Alphabet (23.8).

Tesla is no longer viewed merely as a company that produces electric vehicles (EVs) and batteries – its original purpose. In 2025, despite selling only about 10% of Toyota’s vehicle volume, it had a market capitalization of $1.4 trillion, exceeding the combined market capitalization of all other automakers.

Tesla’s share price reflects investors’ enormous expectations for the company’s growth and embeds a substantial premium driven by CEO Elon Musk’s promises of future technological breakthroughs in autonomous driving and humanoid robots.

It is worth noting that Tesla’s sales, which grew by 38% in 2023, fell in 2024 (–1.1%) and again in 2025 (–8.6%). This decline was particularly sharp in Europe (–33%), largely because consumers turned away from the brand due to Musk’s activist involvement in the Trump administration and his radical rhetoric on the social network X. Curiously, this did not translate into a fall in the company’s share price – on the contrary, the P/E ratio actually increased.

The radical winds sown by Musk have triggered symmetrical storms in Tesla’s sales. Intense competition from Chinese EVs and the end of U.S. fiscal credits for EV purchases worsened sales projections and led to the decision to suspend production of the Model X and Model S, made public on January 28. Yet, despite Musk’s grand, visionary narrative about millions of humanoid robots and the imminent arrival of fully autonomous vehicles, deadlines continue to slip.

The CyberCab / RoboTaxi has been promised for “next year” since 2016. Meanwhile, Waymo (Google) is rapidly expanding operations in the US; Zoox (Amazon) and Cruise (GM) are further ahead than Tesla. The same is happening in the Chinese market, dominated by Apollo Go (Baidu), followed by Pony.ai, WeRide, and AutoX (AliBaba). In Europe, WeRide is the leading player, with Wayve, Waymo, and Mobileye (Intel) conducting trials.

Musk then announced that Tesla would refocus on developing Tesla Optimus humanoid robots and advancing artificial intelligence (AI), through a $2 billion investment in xAI, Musk’s AI company.

Musk has committed to putting Tesla Optimus humanoid robots on sale as early as 2027, at a price below $20,000. He has called them “the greatest product ever,” claiming that, in the long run, they could push Tesla’s market capitalization to $20–25 trillion.

This timeline is striking not only because Tesla still has no Optimus robots working in its factories (as Musk stated last year), but above all because Ashish Kumar, head of Tesla’s Optimus AI team, left the EV maker in late 2025 to join Meta Platforms – for lower pay. Again, other companies appear to be further along in product development – AgiBot (Agibot), Unitree Robotics (G1), UBTECH in China; Neura Robotics (4NE-1), 1X Technologies, PAL Robotics (TALOS) in Europe; Boston Dynamics (Atlas) and Agility Robotics (Digit) in the USA.

The growing cracks in this narrative of endlessly promised radiant tomorrows are increasingly calling into question Musk’s credibility as a technological and business savant. They may also prompt many investors to ask whether the risk of investing in Tesla is becoming simply too high.

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