Wall Street is making a big mistake: still regarding Tesla as an automobile company

Tesla (TSLA) released its financial report for the third quarter of 2025 last week. Due to a sharp drop in profits and tightening profit margins, the company's stock price declined. However, these don't really matter. Although Tesla's current automotive business is facing challenges due to the loss of tax credits, investors have missed a crucial signal: Tesla is systematically moving away from being just an automotive company.

Investors shouldn't just focus on automobile sales data.

Tesla is not an ordinary automaker like Ford or General Motors. Instead, it is a flexible and continuously transforming company. Through substantial investments in autonomous driving technology, Tesla is fundamentally transforming into a robotics enterprise. Traditional competitors who ignore this crucial transformation will pay the price.

Since its establishment in 2003, Tesla has been operating based on the concept of "disruptive innovation" - launching products that initially perform worse than traditional competitors but ultimately dominate the market. Just as smartphone cameras, with their convenience and continuous innovation, eventually replaced digital cameras.

The phenomenon can be perfectly explained by "The Innovator’s Dilemma" published in 1997 by Harvard professor Clayton Christensen. He proposed that traditional enterprises often ignore disruptive innovations from the low - end market until it's too late. Tesla is precisely such a disruptor. While its competitors are still sticking to sustaining innovations, Tesla is reshaping the fields of transportation, energy, and robotics.

Undoubtedly, executives of traditional automakers like General Motors are well aware of the ultimate threat posed by Tesla's "Full Self - Driving" (FSD) technology, but they fail to recognize the urgency. General Motors executives said last week that their "hands - free, eyes - off" autonomous driving product may not be launched until 2028, while Tesla's FSD technology is already in use.

Competitors like General Motors have been slow to respond effectively to Tesla's FSD technology, which is equivalent to handing over the victory in the electric vehicle transformation to Tesla. This will enable Tesla to fully transform: using autonomous driving technology to reshape cars into basic road robots capable of collecting data. This transformation will constitute a significant competitive advantage for Tesla.

This "robotization" foundation also supports a grander vision: electric heavy - duty trucks, futuristic buses, and the humanoid robot project that Elon Musk claims "will account for 80% of future sales." Transforming into a robotics platform is the first step for Tesla to enter a vast new market.

Stop measuring Tesla by the standards of traditional automakers. What seems like an "unrealistic premium" reflects its positioning as a "disruptive robotics enterprise" rather than the value of an "automotive company." Investors should adjust their strategies accordingly: Smart money will ignore the short - term noise of the third quarter and choose to invest in "the company building smartphones" rather than "the company still improving digital cameras."

The author of this article is a contributor to Forbes. The content of the article only represents the author's personal views.

This article is translated from: https://www.forbes.com/sites/jonmarkman/2025/10/27/wall-street-still-thinks-tesla-makes-cars-thats-the-real-mistake/

Original title: "Wall Street Still Thinks Tesla Is an Auto Company. That's the Real Mistake"

This article is from the WeChat official account "Forbes" (ID: forbes_china). Author: Jon Markman; Translator: Björn & Rach; Proofreader: Lemin. Republished by 36Kr with permission.