Elon Musk still makes some of America’s best electric cars. Earlier this summer, I rented a brand-new, updated Tesla Model Y, the first refresh to the electric SUV since it debuted, in 2020. Compared with even just two years ago, when the Model Y became the world’s best-selling car, many companies make great EVs now. Some of them have the Model Y beat in certain areas, but for the price, the Tesla is still the total package.
Now, imagine how good Teslas could be if Musk apparently wasn’t so bored with making them. With the exception of the struggling Cybertruck, Tesla hasn’t released an entirely new electric car in five years. Musk has indicated that he wants Tesla to primarily focus on building robotaxis and robots. Autonomous-vehicle technology “is the product that makes Tesla a ten-trillion company,” he told his biographer, Walter Isaacson. “People will be talking about this moment in a hundred years.” All the while, Tesla has continued to make almost all of its money from selling cars.
But now it’s clearer than ever that Tesla’s future is not in selling cars. The company’s latest “Master Plan IV,” which was released earlier this week, makes no mention of any new electric cars in the works. It is instead a technocratic fever dream, predicting a future in which humanoid robots made by Tesla free us from mundane tasks and create a utopia of “sustainable abundance.” To the extent that cars are mentioned at all, it’s in the context of robotaxis, or the batteries that power them. In other words, Tesla, the biggest EV company in the country, wants out of the car business.
This new master plan—released on Musk’s platform, X, naturally—might be easy to ignore. The roughly 1,000-word document is exceedingly vague and includes language like this: “The hallmark of meritocracy is creating opportunities that enable each person to use their skills to accomplish whatever they imagine.” Even Musk conceded on X that the plan needs “more specifics.” But Tesla has released only three previous master plans since its founding in 2003, and generally, they have paved the way for Tesla’s future. The first one, published in 2006, laid out the path that Tesla would end up taking with its EVs: Start with an expensive electric car, then use the profits from that to branch out into more affordable ones. Nearly all of Tesla’s competition still follows the same road map. Then, in 2016, “Master Plan, Part Deux” stressed a deeper vision for more electric cars, including a future SUV that became the Model Y and “a new kind of pickup truck.” What that one was is pretty obvious today.
If this week’s master plan reflects a company that is dead set on moving beyond cars, the divergence started back around the time of that second report. Even in 2016, Musk envisioned a future in which fully autonomous cars generated passive income for people while they worked or slept. The third master plan, released in 2023, is a 41-page white paper about the future of sustainable energy and how it could power fleets of autonomous vehicles. But the latest version is far more focused on AI than its predecessors were. Even just the visuals are telling: In one image in the master plan, a family plays Jenga on their coffee table while a Tesla robot waters the plants behind them. Right now, Musk has more of a reason than ever to go all in on robots: Today, Tesla’s board unveiled a new potential pay package for its CEO, promising him as much as $1 trillion—yes, trillion—if he meets certain targets, including deploying millions of robots and robotaxis in the next decade. (Tesla did not respond to a request for comment.)
Granted, Musk is onto something here. Many in the auto industry believe that technologies such as electric power and autonomous driving will converge over time, which is why they’re bullish on EVs in the long term. But Musk’s view of that timeline is likely overly ambitious. Nobody’s making any “passive income” from a self-driving Tesla, as Musk said they would by 2020. Even its driverless “robotaxi” service is up and running in only Austin and San Francisco. Tesla is far behind Waymo, the driverless-taxi service owned by Google’s parent company that is picking up riders in five cities, and is quickly spreading to many more. Meanwhile, Tesla’s humanoid “Optimus” robot is unproven, and the project has reportedly struggled with delays and leadership turnover.
But by betting everything on AI, Tesla is sacrificing the very thing that the company knows how to make so well: cars. Autonomy has already come at the expense of new EVs. Last year, Musk reiterated that he feels it would be “pointless” to make a $25,000 car unless it was fully autonomous. Tesla could be financing its self-driving-technology dreams by making that affordable EV or a more conventional pickup truck, but Musk seems to see that as some kind of distraction. If his master plan doesn’t pan out, there won’t be much left of Tesla. The company’s sales have collapsed across the world, in part because of Musk’s politics and in part because Tesla is getting hammered by EV newcomers from China. The master plan doesn’t outline any way forward.
Musk has learned the hard way that making cars is a brutal business. The costs are high, and the profit margins are slim. Fighting over market share with Volkswagen and Ford isn’t an expedient way to colonize Mars. But Tesla’s retreat from the electric-car business is everyone’s loss. Tesla is a big reason that so many automakers have frantically begun to make EVs in the past few years. It showed the rest of the industry that if you build high-tech electric cars and they’re actually good, people will buy them. Under Donald Trump, as incentives to make and sell EVs are vanishing, plenty of automakers in America are already walking back their once-ambitious electric plans. If the biggest seller of EVs continues to move away from what it helped create, Americans will end up with cars that continue to pollute. That certainly doesn’t get us to a world of “sustainable abundance.”
