Former Stellantis CEO Carlos Tavares Predicts Tesla May Exit Auto Industry Within a Decade
Carlos Tavares, who stepped down as CEO of Stellantis in late 2024, has made a bold prediction about the future of Tesla. In an interview with French newspaper Les Echos, Tavares suggested that Tesla might not exist as an automaker in the next ten years. He believes Elon Musk could shift his focus away from the car business toward other ventures such as humanoid robots, SpaceX, or artificial intelligence.
**Chinese Rival BYD Surpasses Tesla in Global EV Sales**
Tavares identified Chinese automaker BYD as a significant threat to Tesla’s dominance in the electric vehicle (EV) market. Earlier in 2025, BYD overtook Tesla in global EV sales, marking a turning point. Tavares described BYD as “more efficient and cost-effective” compared to Tesla.
Tesla’s market share in China has also taken a substantial hit, dropping from 16% in 2020 to just 5% today. Competitors like BYD, Nio, and XPeng have captured market share with competitively priced models and advanced technology. Elon Musk himself acknowledged last year that “Chinese car companies are the most competitive car companies in the world.”
**Financial Challenges Amidst Record Sales**
Despite reporting a record $28 billion in revenue—a 12% increase year-over-year—Tesla missed profit expectations for the fourth consecutive quarter. The company’s shares rose only 9% so far in 2025, making Tesla one of the weaker performers among major tech stocks.
Tesla’s CFO revealed that tariffs on auto parts, a carryover from trade policies during the Trump administration, cost the company over $400 million. Additionally, aggressive price cuts aimed at maintaining sales volumes have squeezed profit margins, challenging Tesla’s premium brand image.
**Tesla’s Response to Intensifying Competition**
In response to mounting competition, Tesla has lowered prices and ramped up production at its Shanghai factory. China deliveries increased by 33% year-over-year, supported by the introduction of more affordable “Standard Range” versions of the Model 3 and Model Y. However, these price cuts reduced profit margins and undermined Tesla’s positioning as a premium automaker.
Meanwhile, Chinese companies like BYD have expanded beyond domestic borders, entering European and Australian markets with competitively priced electric vehicles.
**Additional Challenges Facing Tesla**
Tesla faces several headwinds beyond competition. The elimination of U.S. EV tax credits has removed a major purchase incentive, potentially hurting sales. Supply chain disruptions and ongoing geopolitical tensions between the U.S. and China continue to pose risks, especially for Tesla’s Shanghai operations.
Concerns have also been raised about Elon Musk’s divided attention. Over the past year, Musk spent significant time working with the Department of Government Efficiency under the Trump administration, sparking worries about leadership focus.
**Tesla’s Ambitious Pay Package to Retain Musk**
Tesla’s board is clearly aware of the risks associated with losing Musk’s leadership. To ensure his continued focus on the company, the board proposed a staggering 10-year compensation package valued at approximately $1 trillion. The package’s metrics demand that Tesla’s market capitalization increase by 500%, reaching $8.5 trillion.
However, two proxy advisory firms have recommended shareholders vote against the plan, citing concerns over the board’s broad discretion in determining when Musk meets the ambitious targets. Tesla’s board chair Robyn Denholm defended the proposal ahead of the shareholder vote scheduled for November 6.
**Musk Responds to Tavares’s Prediction**
Elon Musk dismissed Carlos Tavares’s forecast on X (formerly Twitter), stating that the former Stellantis CEO “has absolutely no clue.” Despite the concerns, Tesla’s valuation remains exceptionally high, trading at over 200 times its current earnings. Investors are betting that Tesla’s future growth will come not only from electric vehicles but also from advancements in robotics and artificial intelligence.
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As Tesla navigates increasing competition, financial pressures, and questions about leadership focus, the coming years will be critical in determining whether Musk’s vision will keep the company at the forefront of innovation or if new challenges will reshape the electric vehicle landscape entirely.
https://coincentral.com/former-stellantis-ceo-predicts-tesla-may-exit-car-industry-within-10-years/
