Farewell, Tesla. Elon Musk gives up on electric vehicles to start a new company.
Tesla and its media-savvy CEO, Elon Musk, shocked everyone with something few anticipated after years of being associated with electric vehicles. Following months of losses and a historic drop in sales, Musk concluded that drones, not electric cars, were the way of the future.
"Any country that cannot produce its own drones will be a vassal state to any country that can," he conveyed to the world in his recent remarks, in addition to announcing his new business direction.
Change is inevitable, and it couldn't have come at a worse moment, as the European Automobile Manufacturers' Association (ACEA) reports that Tesla's sales in Europe dropped by 52% in a single month, from 11,540 units in April 2024 to just 5,475 units in May.
The drop was about 49% in major markets like the UK and the nations that are members of the European Free Trade Association (EFTA). Furthermore, Tesla saw a 46% drop in worldwide sales in the first quarter of 2025, with especially low numbers in China and Europe.
Morgan Stanley estimates that in the upcoming years, the market for these devices and eVTOL (extensible vertical take-off and landing) aircraft will be valued at approximately €9 billion. China controls the majority of the market, and Musk claims that the US is "currently incapable of producing drones on its own." This makes it an irresistible piece of the pie.
Regarding geopolitics specifically, the entrepreneur clarified that, in his opinion, having the capacity to produce drones is essential. "China makes more drones in a day than the United States does in a year," he remarked.