Silicon Valley Observation: On the 15th anniversary of Tesla's listing, Elon Musk is no longer dreaming of electric cars.

This week marks the 15th anniversary of Tesla's listing. From being an early pioneer in electric vehicles to becoming the world's most valuable automaker with a market capitalization of over a trillion dollars, Elon Musk spent more than a decade reaching the pinnacle with Tesla.

Fifteen years later, facing both internal and external challenges, Musk has stopped talking about the grand goal of electric vehicles and shifted Tesla's future blueprint towards autonomous vehicles and robots (16.950, -0.23, -1.34%). However, he himself has become the biggest uncertainty for Tesla.

From the Brink of Bankruptcy to a Trillion-Dollar Market Capitalization

On June 29, 15 years ago, Tesla completed its initial public offering (IPO) on the NASDAQ, raising $226 million. Despite the overall decline of the US stock market that day, Tesla's stock price soared by 40% on its first day of listing, reaching a market capitalization of $2.2 billion. Tesla's listing was of great significance as it was the first US automaker to go public in more than half a century since Ford in 1956.

Just one day before turning 39 (his birthday is on June 28), Musk, accompanied by his family and company executives, arrived in Manhattan, New York, and proudly rang the bell at the stock exchange. British actress Talulah Riley was his fiancée at that time, and the two got married in September of that year.

When the listing bell rang, Musk excitedly raised his left hand in a victory gesture. This was his first successful attempt at leading a company to go public. Although he was a co-founder and the largest individual shareholder of PayPal, he was ousted early on. PayPal's subsequent development and listing were all under the leadership of Peter Thiel, and Musk, who had been out of the company for more than a year, didn't even attend the listing bell - ringing ceremony.

Eight years after PayPal's listing, Musk finally led Tesla to achieve its own listing milestone. Although Tesla wasn't founded by him, the company bears his personal mark and is inseparable from him. Musk joined Tesla as an early investor and became the chairman more than half a year after its establishment. Later, in 2018, he removed the founder and took on the positions of CEO and chairman himself.

When Tesla went public, perhaps no one could have imagined that this small company, which almost went bankrupt the previous year, would become the world's most valuable automaker with a market capitalization of over a trillion dollars. At that time, Tesla had only sold more than 1,000 Roadster sports cars, with a cumulative revenue of only $150 million, and it was still two years away from the launch of the Model S.

At that time, Musk was trying hard to show his ambition and dreams to the capital market: a small company far from Detroit, the center of the US auto industry, could overcome technological and financial challenges in Silicon Valley, the high - tech hub, and produce electric vehicles that would be popular in the mass market. It was a thorny path.

In 2010, electric vehicles were still a niche product. According to IEA data, the global sales of pure electric vehicles that year were only 12,000, accounting for only 0.016% of the global new car sales. The best - selling model was the Nissan Leaf. Tesla was the leader in the US electric vehicle market, but it only had one sports car, the Roadster, which cost more than $100,000.

Most of Tesla's early competitors at that time have almost disappeared. Fisker, which achieved mass production and delivery earlier, eventually went bankrupt due to battery problems and a hurricane, leading to a cash - flow crisis. Even more unexpectedly, more than a decade later, Fisker 2.0 still couldn't escape the fate of bankruptcy.

Tesla almost went under in 2009. After Musk took over as CEO, he raised more than $600 million in just a year and a half, getting the company out of the financial dilemma, which made the subsequent listing possible. This included his own last $40 million, $50 million each from Toyota and Daimler, and most importantly, a $465 million low - interest loan from the US government.

Without the US government's auto support loan, Tesla would have died in early 2010, and there would have been no subsequent listing and glory. To get this life - saving loan, Musk respectfully chased after the project leaders of the Obama administration's Department of Energy for approval. That year, Tesla got the loan and successfully went public, which meant it finally got back on track and could calmly promote the mass production and launch of the Model S.

In 2013, Tesla issued $1 billion in bonds and repaid the US government loan nine years ahead of schedule. Meanwhile, although Fisker received a larger loan of $530 million (only $190 million actually arrived), it still went bankrupt due to a cash - flow crisis. By the time of Fisker's bankruptcy auction, the US Department of Energy only recovered $53 million.

Musk succeeded. Over the past decade, Tesla has successively launched the Model S, Model X, Model 3, Model Y, and Cybertruck. It has not only become the world's largest pure - electric vehicle company in terms of sales, with revenue exceeding $100 billion last year, but also the world's most valuable automaker with a market capitalization of over a trillion dollars. It is the eighth - largest listed company in the US by market capitalization, only behind many AI, Internet, and chip companies.

Fifteen years have passed. If an investor had bought $10,000 worth of Tesla stock back then and held it until now, those shares would be worth more than $3 million, a 300 - fold increase in investment. If the same amount of money had been invested in the S&P 500 index, it would now be worth only $57,000. Meanwhile, Musk has become the current world's richest man, with a personal fortune of over $400 billion.

Autonomous Driving is the Future

However, 15 years after the listing, Tesla's dream is no longer to sell more electric vehicles, and Tesla's value is no longer related to electric vehicles. At least, that's what Musk believes and what he's been selling to investors: Tesla's future value lies in autonomous vehicles and robots.

Over the past weekend, it was Musk's 54th birthday. Instead of celebrating for himself, he led a unique Tesla marketing event: a brand - new Model Y drove out of the Austin, Texas factory without a driver, traveled on the highway and through the streets for half an hour, and was finally delivered to the pre - ordered customer. Of course, Tesla's safety team was monitoring the whole process remotely.

This sci - fi - like vehicle delivery process is Musk's forte in marketing. He needs this footage to prove Tesla's autonomous driving capabilities to the outside world. Although the trial operation of Tesla's autonomous taxis in Austin last week demonstrated the self - driving performance of FSD, it also exposed many technological flaws.

During the past week when the autonomous vehicle trial operation was launched, Tesla's stock price dropped by 9% in total. This explains why Musk and Tesla are so eager to launch the "Model Y self - delivery" marketing campaign. However, the road conditions and technical difficulties of the Model Y delivery are not the same as real - world passenger - carrying operations.

For Tesla now, autonomous driving is where its value lies. Questioning Tesla's FSD is equivalent to suppressing Tesla's stock price. Musk clearly stated in the earnings conference: "If someone doesn't believe that Tesla will solve the autonomous driving problem, I think they shouldn't invest in this company." He added: "We will do it, and we are doing it."

In the field of L4 - level autonomous taxis, Tesla didn't start early. Google's Waymo has been operating autonomous taxi services in multiple US markets, and Baidu has also launched Apollo Go in China. Different from these companies that started directly at the L4 level, Tesla has chosen a completely different technical solution and business model, upgrading from L2+ - level assisted driving.

Compared with Google and Baidu's highly customized, expensive L4 - level autonomous vehicles based on high - definition maps and multiple sensors, Tesla's autonomous vehicles are just regular Model Ys equipped with FSD, without much modification. In terms of both cost and quantity, Tesla's technical solution has a huge advantage.

Theoretically, any Tesla vehicle equipped with FSD and new hardware can be used for taxi services. Obviously, if Tesla's FSD can handle this task, it can expand the market exponentially. This has been Musk's vision for Tesla's future since 2016.

Defects in the Visual Solution

Last week, Tesla launched a restricted autonomous vehicle trial service in Austin, Texas, where its headquarters is located. It is only available to invited Tesla - friendly influencers and owners, operates only in areas with good road conditions in Austin, has a safety officer sitting in the passenger seat who can take over and brake at any time, and suspends operations in bad weather.

However, even with so many precautions, Tesla's autonomous vehicles still exposed many technical problems last week, including the inherent defects of the FSD's pure - vision solution. Many videos posted by test riders on social media show that these Tesla autonomous vehicles have had more than a dozen minor or serious problems. Fortunately, the safety officers intervened in time to prevent accidents.

These problems include: suddenly decelerating during driving and even stopping in the middle of the road; driving into the wrong lane and running onto the curb; parking in no - parking zones and speeding in speed - restricted areas; and even reversing in front of a truck without slowing down to keep a safe distance. Each of these is a potential accident hazard and could lead to an accident.

In just one week, the safety officers sitting in the passenger seat have had to take over the vehicle multiple times to avoid accidents; there was even one time when the safety officer had to sit in the driver's seat and drive the malfunctioning vehicle away. Obviously, this level of autonomous vehicle is far from what Musk claims as "no one needed inside the car", and it can't be resolved by a Model Y self - delivery marketing stunt.

It's worth noting that these worrying incidents come from a fleet of only 10 to 20 vehicles, and the operation area is limited to a very small part of the city manually mapped by engineers. Musk had previously ambitiously promised to deploy more than 1,000 autonomous taxis in Austin "within a few months" after the launch and have 1 million such vehicles on US roads by the end of 2026.

But judging from the actual test results, Tesla's FSD is still far from the level of Waymo's fully autonomous vehicles. There must always be a safety officer in the car to take over or brake in an emergency. The safety performance of FSD is still that of an advanced assisted - driving system and cannot achieve full - scale autonomous driving.

Some obvious violations have caught the attention of the National Highway Traffic Safety Administration (NHTSA) in the US, including obvious speeding and crossing the double - yellow line on the road. The agency contacted Tesla last week for more information but has not launched a formal investigation yet. Before Tesla launched the trial operation in Austin, the NHTSA asked them to provide a technical response plan.

Among these exposed problems, the sudden and unexplained deceleration and braking (also known as ghost braking) is the most common problem with FSD in the past few years, and Tesla has not effectively solved this defect. The eight - car pile - up accident on the San Francisco - Oakland Bay Bridge at the end of 2022 was caused by FSD suddenly decelerating and braking during driving.

It is generally believed that ghost braking is an inherent defect of Tesla's pure - vision solution. When the camera is affected by sunlight glare and other factors, it may misjudge and think there is an obstacle ahead, causing the vehicle to suddenly decelerate or brake. In contrast, Google's autonomous vehicles equipped with lidar and millimeter - wave radar can still conduct safety assessments through other sensors even if the camera malfunctions unexpectedly, thus avoiding driving errors.

Running onto the curb is an unacceptable error for L4 - level autonomous vehicles. In 2022, Pony.ai's test vehicle had this problem during a road test in Silicon Valley, which led to the suspension of its full - autonomous test license in California. However, Tesla's trial operation this time is in Texas, not California.

If, as Musk envisions, the autonomous driving fleet is widely promoted before the FSD technology is fully developed, there may be more serious safety hazards in the future, and even fatal accidents could occur. Once such an event happens, it may have a major impact on Tesla's brand image and public trust, and further affect its strategic position in the global autonomous driving competition.

This is a decision that Musk must carefully consider. At least for now, Tesla's technical team is still very cautious about the autonomous vehicle passenger - carrying trial. Some passengers have reported that Tesla's technical team asked them to get off the vehicle early because of the forecast of heavy rain and concerns about FSD's performance in the rain.

Of course, there is also the future of Tesla's robots. Musk said that Tesla will eventually launch humanoid robots like those in "Star Wars". It is expected that thousands of Optimus robots will be working in Tesla's factories by the end of this year and will be available for sale next year. He also painted a big picture: he believes that Tesla's market capitalization will reach $25 trillion in the future because of this.

Electric Vehicles are No Longer in the Spotlight

So, what about Tesla's current core business, electric vehicles? Five years ago, Musk publicly proposed a plan for Tesla to achieve annual sales of 20 million vehicles by 2030. However, this grand goal was only mentioned for two years. Tesla's sales stopped growing at 1.8 million in 2023 and declined last year, with an even more severe decline this year.

Annual sales of 20 million are now an impossible goal. Musk has stopped talking about it since last year, and Tesla has also removed this goal from its website. Moreover, Musk doesn't even discuss how to increase Tesla's sales, not even in the earnings conference calls.

Perhaps he has accepted the reality. The problem for Tesla now is not "slowing growth" but "how much the sales will decline". No one knows how much Tesla's sales will drop this year. Based on the current sluggish situation, the decline may exceed 10%.

It seems that Musk can't stop Tesla's downward trend. After a 1% decline in annual sales last year, sales dropped by 13% in the first quarter of this year, and there is no sign of improvement in the second quarter. Even worse, Tesla can't stop the sales decline in its three major core markets: China, the US, and Europe.