AI-this, autonomy-that—it’s almost all you hear about in the tech world anymore. Everybody and their grandmother is running their own AI training model, am I right? Despite being commonplace, it’s clear that these buzzwords are inspiring investor confidence in the stock market. And Tesla’s focus on robots and AI, not cars, seems to be more than capable of moving the needle for Wall Street.
Welcome back to Critical Materials, your daily roundup for all things electric and automotive tech. Today, we’re chatting about investors dumping their confidence into Tesla’s technology rather than its cars, Elon Musk declaring EV range a “solved” problem, and Tesla making it clear that it only wants to license Full Self-Driving to companies that are serious about it. Let’s jump in.
30%: Investors Make Their Stance Clear: Tesla Isn’t A Car Company
Photo by: InsideEVs
Tesla just posted its first-ever year-over-year decline in deliveries, a milestone that no CEO ever wants to hit. In any other universe, investors would sound the alarm, demanding answers about why Tesla’s deliveries shrunk in a growing market and what Tesla is planning to do to remain competitive in today’s changing EV landscape.
But this isn’t just any ol’ company. This is Tesla, which means to expect the unexpected. Despite news that deliveries were down and the company missed both earnings and revenue, Tesla’s quarterly earnings call wasn’t filled with unhappy investors demanding accountability. Instead, those same people honed in on what they really see as the driver behind Tesla’s value: artificial intelligence, autonomy and humanoid robots.
Now, analysts originally anticipated that Tesla’s CEO would be grilled about Tesla’s new affordable car. Deutsche Bank spilled the news on the model what it calls the “Model Q” in December. The same note revealed that Tesla planned to announce “other new vehicles” throughout 2025, something which appeared to be hinted at in Tesla’s earnings report. However, contrary to analysts’ belief, not a single question was asked about a new model during the earnings call.
Instead, it turned into a sales pitch filled with ideas of how Tesla’s future plans go well beyond mere automobiles. Musk spent the majority of the call hyping up the future of Full Self-Driving, its Optimus humanoid robot and Tesla’s vision of AI dominating the world.
Investors were happy to entertain the ideas. $TSLA shares jumped in pre-market trading and they’re on an upward trajectory as I write this.
Not a single soul asked (or who was selected to ask, anyway) why Tesla’s lineup—aside from the refreshed Model 3, Model Y, and Cybertruck—has remained stagnant while other automakers roll out cheaper and competitive EVs, especially in China where domestic brands reign supreme and companies like BYD are eating into market share with cars that people can actually afford.
Nor did anybody question Tesla’s income from regulatory credits when its CEO supports an administration in favor of gutting federal guidelines that actually help Tesla to be able to sell these credits to other automakers. And gains from Bitcoin? Well, Musk didn’t crown himself The Dogefather for nothing.
It’s clear that Tesla believes it’s way more than just a car company—it’s focusing on being an AI company. Investors seem to buy it, yet Tesla’s stock barely flinched this week when other AI-focused companies took the hit attributed to DeepSeek’s launch of its open-source R1 model. The earnings call was no different. In fact, Tesla’s shares closed at $395.21 on Wednesday ahead of the earnings call. During after-hours trading, it shot up to $410.
Investors are content to keep the hype train rolling. As long as Tesla is willing to serve up AI visions on a platter (along with a side of Optimus and FSD for dessert), the stock market is happy to keep Tesla’s car business as an afterthought.
60%: Elon Musk Declares EV Range ‘A Solved Problem’
Photo by: InsideEVs
During Tesla’s Q4 earnings call held on Wednesday, CEO Elon Musk made a glaring prediction about EVs: the move from combustion to battery power is “inevitable.”
While he might be right, his justification feels a bit off, or at the very least, bordered pure conjecture. It did, however, give a bit of insight into why the CEO is in favor of curbing subsidies for the EV industry. After all, if everyone is going to switch eventually anyway, why foot the bill?
There was one particular point that Musk made that may not sit right with those still waiting to adopt EVs. According to Musk, the only thing holding folks back from making the switch to an EV was range, and that, Musk says, is a “solved problem.”
Here’s what Musk said during the earnings call:
I think the that sustainable transport is inevitable. I’m highly confident that all transport uh will be autonomous electric, including aircraft, and that it simply can’t be stopped any more than one could have stopped the Advent of the […] internal combustion engine.
Like, even if you’ve been the biggest horse Advocate on Earth, horses are the way. “Not these new-fangled automobiles. You can’t stop the Advent of the automobile. It’s going to happen,” and you can’t you can’t stop the Advent of electric cars. It’s going to happen. The only thing holding back electric cars was range and that is a solved problem.
To Musk’s credit, sure, EV range has improved. Hell, looking back to the General Motors EV1 which offered just 140 miles after its upgrade to nickel-metal hydride batteries will show you just how far we’ve come. Long gone are the days of the 100-mile EV and compliance cars.
But to consider range “solved” is an entirely different statement.
For many drivers, EV range still isn’t where it needs to be. Just look how the stated range and real-world range differ so vastly for some EV owners, including those in cold climate states where real-world range can decrease 30% or more during the winter months. This makes the problem of range feel a lot less “solved” when you consider a 300-mile EV might struggle to break 180 miles in the cold. And let’s not even get started on towing.
One could argue that this isn’t a range problem, but a charging problem. That could be a moot point in the U.S., except the new Presidential administration is openly looking to gut progress on bettering the country’s charging infrastructure. It also doesn’t take into account less densely populated areas of the U.S., or the rest of the world which may not have extensive charging networks.
It’s clear that other automakers accept EV range as an area of improvement. In fact, many companies around the globe are scrambling for progress on energy density—the real key to solving EV range. There’s a lot that goes into making a battery work in the real world on top of just how much electricity it can hold: charging speed, number of rated discharge cycles, and ease of manufacturing to name just a few. Reaching equilibrium between all of those is what many battery makers are working on nailing in cutting-edge projects today.
CATL, for example, revealed a fast-charging LFP battery capable of achieving up to 621 miles of range with a density of 205 watt-hours per kilogram. For comparison, BYD’s competing second-gen Blade battery system achieved 190 wh/kg while more robust (but harder to manufacture) cylindrical cell batteries can achieve a whopping 240 wh/kg or more of energy storage.
The point here is that declaring range a solved problem undermines the progress and innovation that other OEMs are actively working to better. EV batteries are heavy, and by failing to innovate on the energy storage side of the car, these behemoths won’t get any lighter. Yes, range is better, but “solving” it—as Musk so monochromatically declared it—is another thing entirely.
I have to admit, it makes a great soundbite, though.
90%: Telsa Tells Automakers Not To Waste Its Time Unless They’re Serious About FSD
Remember when Tesla said that it would be “happy” to license its Full Self-Driving to other automakers looking to equip their cars with some autonomy? That was almost two years ago, and despite Tesla saying at the time it was in talks with a major OEM to do exactly that, no partnerships have publicly materialized from Elon Musk’s claims.
During Tesla’s quarterly earnings call, Musk was asked if other companies were interested in Tesla’s FSD software. His answer made one thing clear: Tesla doesn’t want to waste its time entertaining offers of a carrot dangled in front of it. If another automaker is knocking at its door, it better be prepared to go big. And if it’s not? Well, don’t even bother knocking.
Here’s Musk’s shedding some light on talks about licensing FSD:
What we’re seeing is, at this point, significant interest from a number of major car companies about licensing Tesla’s Full Self-Driving technology. What we generally said is the best way to know what to do is take one of our cars apart and then you can see where the placement of the cameras are [and] the thermal needs are of the Tesla AI computer. That’s better than us sending some CAD drawings.
We’re only going to entertain situations where the volume would be very high, otherwise it is not worth the complexity. And we will not burden our engineering team with laborious discussions with other engineering teams until we obviously have unsupervised Full Self-Driving working throughout the United States.
I think the interest level from other manufacturers to license FSD will be extremely high once it is obvious that, “Unless you have FSD, you’re dead.”
Interestingly, Musk also added a tidbit about Tesla’s conditions for licensing FSD. It would seem that despite the OEM being “happy” to license its tech, it might not be ready to do so just yet. Musk said that Tesla wouldn’t “burden [its] engineering team with laborious discussions” until the automaker has unsupervised FSD working throughout the U.S.—something which Tesla has (once again) claimed would be ready by the end of the year.
Automakers are quickly discovering just how much of a sunk cost autonomy really is. Hell, GM even killed off its commercial robotaxi operations for Cruise, but it still kept Super Cruise alive under the belief that personal autonomy will be the future. But for automakers that can’t afford to just light piles of cash on fire, licensing a prebaked solution like FSD makes sense—if it works.
At this point, if OEMs are truly rapping at Tesla’s door to license and implement the tech in their own cars as-is, it would simply be driver-assistance features, because, and let’s be honest, FSD still isn’t full self-driving in the literal definition of the word. That raises the question: are other OEMs genuinely interested in partnering with Tesla for its as-is tech, or is the thought of licensing a fully functional FSD package just a PR flex? Let’s see if it takes off once Tesla meets its goal of wide deployment. Its paid robotaxi launch in June may be a true public test worth watching out for.
100%: When Robotaxis Roll Out, What Will Be The Biggest Challenge?
Photo by: InsideEVs
Tesla’s fleet of Robotaxis is headed to Austin, Texas. Elon Musk revealed that the company plans to roll out for-pay rides starting in June, and it plans to do so with “no one in them”—presumably meaning no safety driver.
There’s a lot to unpack here, but perhaps the biggest takeaway is just how many questions folks are raising about just how quickly Tesla will need to move to make this timeline a reality.
For starters, the question of FSD comes into play. Tesla has been promising unsupervised FSD for years, and people still complain about the cars hopping curbs. Then there’s charging. Assuming that Tesla moves forward with a fleet of existing production cars, someone will still need to be there to plug them in. And let’s not even begin to think about how a human will still need to clean out the car regularly.
As I mentioned before, GM retreated from the commercial robotaxi business specifically because of the challenges surrounding the human efforts needed to make it a reality. It’s unlikely that Tesla is going to have a fleet of Optimus robots doing all of the human tasks associated with the robotaxi network (at least not in June when it plans to launch), so some planning in this department is needed rather quickly.
That said, what is the single biggest hurdle you see Tesla needing to overcome in order to make its robotaxi venture a success? Let me know in the comments.
