Industry Veteran’s Stark Warning
In a surprising assessment that’s sending ripples through automotive circles, former Stellantis CEO Carlos Tavares has predicted Tesla might not exist in ten years and could potentially exit the car business altogether. The seasoned auto executive, who stepped down from leading the Jeep manufacturer late last year, delivered this blunt forecast during an interview with French newspaper Les Echos.
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Tavares pointed to Chinese electric vehicle maker BYD as the primary threat to Tesla’s survival. “BYD was eating Tesla’s lunch with more efficient and cost-effective vehicles,” he reportedly stated, referencing BYD’s recent surpassing of Tesla in global EV sales. The former auto chief suggested that mounting competitive pressure might push CEO Elon Musk to redirect his attention toward his other ventures.
The BYD Factor and Market Realities
What makes Tavares’ comments particularly noteworthy is the timing. Tesla recently reported better-than-expected quarterly results, with revenue hitting $28 billion—a 12% year-over-year increase—and deliveries in China jumping 33%. Yet beneath these surface numbers lies a concerning trend for the EV pioneer.
Over the past five years, Tesla’s market share in China has dramatically eroded, falling from about 16% in 2020 to roughly 5% today. This decline comes as Chinese manufacturers, particularly BYD Auto, have aggressively expanded their electric vehicle offerings with competitively priced models. Even Musk himself acknowledged last year that “Chinese car companies are the most competitive car companies in the world,” lending credibility to Tavares’ competitive analysis.
Musk’s Divided Attention
Adding complexity to Tesla’s situation is Musk’s increasingly divided focus. The CEO spent much of the past year serving in President Donald Trump’s administration as a leader of the Department of Government Efficiency. During that period, Musk told Fox News he was balancing his responsibilities “with great difficulty,” raising questions about his bandwidth for managing Tesla’s intensifying competitive challenges.
Tavares specifically suggested that Musk might eventually “decide to leave the automotive industry to refocus on humanoid robots, SpaceX or artificial intelligence.” Given Musk’s track record of pursuing multiple ambitious ventures simultaneously, this scenario doesn’t seem entirely far-fetched to industry observers.
Stock Market Implications
The former Stellantis chief didn’t mince words about Tesla’s valuation either. “Tesla’s stock market value loss will be colossal because this valuation is simply stratospheric,” Tavares warned. His comments come as Tesla shares have experienced significant volatility throughout the year, dropping as much as 39% through March before recovering to show an 8.6% year-to-date gain as of Friday.
Meanwhile, Tesla’s board is pushing for an unprecedented $1 trillion compensation package for Elon Musk, scheduled for a shareholder vote on November 6. The package aims to incentivize Musk to achieve staggering goals, including boosting Tesla’s market capitalization by 500% to $8.5 trillion. However, two proxy advisory firms have recommended shareholders reject the proposal, citing concerns about the board having too much discretion in determining whether performance targets have been met.
Broader Industry Context
Tavares’ predictions arrive during a particularly challenging period for the electric vehicle sector. Beyond competitive pressures, Tesla has faced supply chain disruptions partly due to Trump-era tariffs and sales headwinds from the elimination of the EV tax credit in the United States. These factors compound the difficulties facing the entire automotive industry as it navigates the transition to electric vehicles.
What remains unclear is whether Tavares’ assessment represents industry consensus or an outlier opinion. Tesla has repeatedly demonstrated its ability to defy skeptics throughout its history, and the company’s recent China delivery growth suggests it’s not going down without a fight. Still, when a former chief of one of the world’s largest automakers questions another’s survival prospects, the automotive world tends to listen carefully.
The coming years will test whether Tesla can maintain its innovative edge while fending off increasingly sophisticated competition from Chinese manufacturers. For now, Tavares’ warning serves as a sobering reminder that even the most celebrated disruptors face existential threats in today’s rapidly evolving auto landscape.