Late last month, new “Epstein files” from the Department of Justice revealed that Tesla CEO Elon Musk was in regular correspondence with deceased sex criminal Jeffrey Epstein, going as far as to invite himself to his notorious Caribbean island, asking when the “wildest party” would take place in a 2012 email.
It was a damning contradiction of Musk’s previous claims that he’d “refused” Epstein’s offer, and they seemed to throw the billionaire into a tailspin.
Perhaps unsurprisingly, Tesla’s shares have been plummeting since the DOJ’s release. Shares are down almost eight percent over the last five days since the emails were released.
It’s the very last thing Tesla needs right now. The company’s brand has already suffered greatly under Musk’s leadership, with droves of potential buyers being pushed away by his inflammatory rhetoric and embrace of far-right ideals.
The company’s core business has also been floundering as of late, with Musk announcing that it’s ending production of its Model S and X vehicles, while turning the factory that used to make them into a robot assembly line. The move was part of a much broader shift away from selling cars and towards the company’s humanoid robots and AI ambitions.
While Tesla’s valuation remains massively inflated — it’s still worth well over $1.5 trillion — the company’s financials tell an ominous story. Tesla reported its first-ever decline in annual revenue for 2025, with sales slumping across three of the past four quarters. It also saw a whopping 61 percent drop in profits in Q4 of last year, compared to the same period the year before.
The competition is making major headway as well, with German automaker Volkswagen officially overtaking Tesla in fully-electric car sales in Europe last year, according to the latest data. Chinese rival BYD is also handily outselling Tesla these days, making major gains across Europe and becoming the world’s top EV seller.
In other words, Musk’s carmaker’s first-mover advantage has long dried up.
By all indications, it feels like Tesla has come to accept its fate. The company hasn’t launched a fully new model since its Cybertruck in late 2023, which turned out to be a massive flop.
“A big driver for the decline is lack of new products,” Cox Automotive director of industry insights Stephanie Valdez Streaty told Bloomberg. “Any automaker that doesn’t have new products is going to lose market share. Tesla needs new products.”
Infamously lacking customer service and extensive quality control issues are also signs of a company that has long lost its place as an early pioneer in the EV space.
Adding to the company’s woes is Musk’s SpaceX acquiring his own AI startup xAI, turning his space company into a $1.25 trillion behemoth and sparking rumors that Tesla may eventually be folded in as well.
The merger may also be indicative of Musk turning his attention elsewhere. As CNBC points out, he now derives more of his enormous net worth from SpaceX than from Tesla, a symbolic turning point as he seemingly grows tired of pretending to care about EV sales. (Musk has promised that Optimus will account for80 percent of the carmaker’s value.)
The mercurial entrepreneur’s appearance in the Epstein files once again underlines the carmaker’s continuous struggles to control the narrative and rein in the drama.
If the company’s history is anything to go by, there’s certainly a chance the company, which remains one of the most valuable by market cap in the world, will weather the storm. But this time, we’re not talking about scaling up production of the Model 3, a major source of suffering for the CEO almost a decade ago — instead, the company is looking to reinvent itself from scratch.
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