Carlos Tavares has been out as CEO of Stellantis for about a year now, and in the time away he busied himself by writing a book, entertainingly titled in French Un pilote dans la tempête (“A Pilot in the Storm,” although you could perhaps render “storm” as “tempest” and better capture Tavares’ tenure). He has been commenting on the current state of the auto industry and in a recent report he offered some thoughts on Elon Musk and his destiny.
From Live Mint (referencing Fortune and the French paper Les Echos):
“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 was quoted as saying. “Elon Musk will have left the automotive industry,” he added.
This is an astute assessment. While Tesla has entered a bumpy period, without much enthusiasm for new or even promised products (Hello? New Roadster?), Musk seems fairly excited about Optimus robots and xAI, and there’s no question that SpaceX and especially Starlink potentially offer considerably higher future profit margins than what Tesla has delivered.
BYD for the win
Like many others in the industry, Tavares singles out BYD for its rapid progress and the potentially existential quandary the Chinese company poses for Tesla. “I’m not sure that Tesla will still exist in 10 years,” he reportedly said. “It’s an innovative group, but they’ll be beaten by BYD’s efficiency.” That sounds like an extreme prediction, but unless Tesla can convert itself into being a market-leading provider of autonomy and robotaxis, the company could settle into being just a moderately profitable mass-market EV manufacturer. And struggle to maintain its position against a host of rivals.
To prove Tavares and others naysayers wrong, Musk might need to accept that he’s still running a carmaker and make a few concessions to that fact. For example, by introducing some appealing vehicles in different segments. A proper pickup truck, replacing the exotic and unsuccessful Cybertruck. A true three-row SUV. A revamp of the Model S, so that Tesla continues to sell a high-quality EV sedan that appeals to luxury buyers.
Tavares as gadfly
Earlier this year, Tavares gave an interview in which he appeared to be enjoying a happy post-Stellantis life in Portugal. More recently, however, he seems to be settling some scores and trying to cement his reputation as the last empire builder in the car business (Tavares learned from Carlos Ghosn, the disgraced architect of the Renault-Nissan alliance and the empire-builder who showed Tavares how to do the building). Putting Musk in his place is a logical part of that process.
Of course, Musk has kind of built his own empire. True, Tesla isn’t selling cars at the same level as Stellantis, but it’s still sporting a $1.5-trillion market cap. Maybe the robots and the robotaxis will make it worth vastly more. And we haven’t even gotten to SpaceX and its prospective value, or whatever xAI ends up claiming if the AI boom doesn’t go bust. Then again, no car company is a sure thing forever. Tavares isn’t wrong that Tesla could, someday, go away.
