'Do you still believe?' — Why Tesla's most devoted investors are losing faith

Tesla CEO Elon Musk steps out of a hotel in Beijing, China, and boards a Tesla vehicle. [Reuters]

Tesla shareholder Tad Park was once the kind of investor who treated the company like a religion. He was so convinced of Tesla's Full Self-Driving technology that he reportedly placed his own children in the path of a moving FSD-enabled Tesla to prove the system was safe enough not to hit them.

Now he is uneasy. Elon Musk appears increasingly consumed by SpaceX's ambitions — launching data centers into orbit, sending humans to Mars — and is preparing for what could be the largest initial public offering in history, all while seeming to drift further from Tesla.

Park, who took out loans to buy Tesla shares on the strength of his belief in the brand, said the frustration is straightforward. "We just want Musk to really, really focus more on Tesla," he said. "That's what bothers us the most."

That anxiety is showing up in Tesla's share price, which has fallen more than 20% so far this year. Some investors have gone so far as to say publicly they wish SpaceX would acquire Tesla to arrest the company's fading relevance, the Washington Post reported Tuesday.

Elon Musk, founder and CEO of SpaceX, speaks via video screen at the Nasdaq MarketSite in Times Square during SpaceX's NASDAQ listing ceremony in New York in June. [AFP]

Bradford Ferguson of investment group Rebellionaire said Tesla investors are confused — and some feel outright betrayed. "Tesla seems like an afterthought to Musk," he said.

The Tesla that once captivated consumers with sleek, high-performance vehicles and a clear mission to fight climate change is increasingly hard to recognize. The company has restructured around infrastructure and services, placing its humanoid robot Optimus and the autonomous vehicle Cybercab at the center of its strategy.

The goal is to push beyond the traditional auto market and into factory labor and ride-hailing.

The problem is that this "physical AI" business targets corporate customers, not consumers. Tesla is making a sharp turn from a company that built products people use in their daily lives to one that supplies technology to other businesses — and the model has yet to be proven.

The earnings picture reinforces those concerns. Sales surged 26% year-on-year last quarter, yet profit actually shrank.

Tesla has promised for years to deliver fully autonomous driving that requires no human hand on the wheel, but real progress remains slow.

To investors, the Washington Post reported, Musk's long-term roadmap is starting to look like an elaborately constructed fantasy. The ambitions are wide-ranging — producing about 1 billion Optimus robots, helping build the world's largest semiconductor manufacturing facility, and assembling a massive robotaxi network to ferry passengers globally in millions of fully autonomous vehicles. Any single one of those achievements would set Tesla decisively apart from every other automaker and technology company. But so far the company has not delivered the breakthrough that would put investors at ease.

Matt Smith, a partner at Rebellionaire, wrote on X recently: "I no longer believe management's explanations. There have been too many broken promises and missed deadlines." In a separate post he added: "I am an investor. Not a cheerleader."

Gene Munster, managing partner at Deepwater Asset Management, said investors still broadly support Musk's vision — but they are demanding more evidence that it can actually be realized.

"The core question every institutional investor and retail investor has to ask themselves is simple," he added. "Do you believe?"

mokiya@heraldcorp.com