Nearly USD 20 billion in impairments for Ford, more than USD 13 billion in cumulative losses on electric since 2023, and an admission now made explicit: without massive subsidies, pure electric vehicles do not deliver satisfactory profitability for a mainstream automaker. This is not a bump in the road: it is a systemic signal.

Brussels's about-face fits the same return-to-pragmatism logic. By abandoning a strict ban on internal combustion engines by 2035, and rehabilitating hybrids, range extenders, and CO2-neutral fuels, Europe implicitly acknowledges that the transition will be longer, costlier, and more heterogeneous than expected.

Meanwhile, Western automakers face a double whammy: colossal investments made too fast, and extremely aggressive Chinese competition capable of producing electric vehicles at far lower costs. The sector is not dying, but a new hierarchy is taking shape.

Those who resisted the all-electric dogma, starting with Toyota, now appear to be the big winners. Hybrids are emerging as the dominant solution in the short and medium term, while electric becomes one building block among others, no longer the sole industrial horizon.

In this murky landscape, Tesla operates on a different plane. The market no longer values the group as a carmaker, but as a giant option on autonomy, artificial intelligence, and robotics. That explains the recent stock market record and its move past Broadcom in market capitalization.

Driverless Robotaxi tests in Austin are being read as a potential iPhone moment. If the technology is validated and, above all, approved by regulators, the business model would flip to very high-margin recurring revenues, with a scaling capacity far beyond that of traditional auto.

But that valuation rests almost entirely on anticipation. The auto business is deteriorating, sales are falling in Europe, China, and the United States, and the lineup is aging against increasingly dense and often cheaper competition. With a 2025 P/E estimated near 380x, Tesla already prices in a major success scenario on autonomy.

Any regulatory or technological delay would be severely punished. The Tesla-xAI-Optimus convergence can, in time, create a considerable technological moat, but at this stage it remains a promise, not yet an industrial reality. The stock is no longer an auto share; it is a very long-term technology bet.