+0.42% Nearly $20bn in impairments for Ford, more than $13bn in cumulative losses on electric since 2023, and a now candid admission: without massive subsidies, pure electric vehicles do not deliver satisfactory profitability for a mass-market manufacturer. This is not a bump in the road; it is a systemic signal. Brussels' U-turn fits the same return-to-pragmatism logic. By dropping the strict ban on combustion engines by 2035 and rehabilitating hybrids, range extenders, and CO2-neutral fuels, Europe implicitly recognizes that the transition will be longer, more expensive, and more heterogeneous than planned. In the meantime, Western automakers face a double whammy: colossal investments made too quickly, 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 look like 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 muddled 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 record and leap past Broadcom by market capitalization. Driverless Robotaxi tests in Austin are being interpreted as a potential iPhone moment. If the technology is validated and, above all, approved, the business model would shift to high-margin recurring revenues, with a scaling capacity far beyond traditional auto. But this valuation rests almost entirely on anticipation. The auto business is deteriorating, sales are falling in Europe, China and the US, and the lineup is aging against increasingly dense and often cheaper competition. With an estimated 2025 P/E near 380x, Tesla already bakes in a major autonomy success scenario. Any regulatory or technological delay would be punished severely. The Tesla-xAI-Optimus convergence could, 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 name; instead, it's a very long-term technology bet. © MarketScreener.com - 2025