Tesla's Strategy Shift: Elon Musk Keeps Promising an Even Bigger Future, but Is It Just a Bait-and-Switch?

The bait-and-switch. It's a strategy as old as time: Lure someone with a promise that you have no ability to fulfill and then promise them something even bigger to shift their attention.

Tesla (TSLA) CEO Elon Musk is the world's richest man because of his mastery of the bait-and-switch – and some tremendously lucrative pay packages that incentivize him to do just that.

As the late legendary investor Charlie Munger said: "Never, ever, think about something else when you should be thinking about the power of incentives."

This "1-2 punch" has helped keep Tesla's stock in the stratosphere for years, and Musk's most recent pay package – worth as much as $1 trillion – may keep the stock in orbit for years more.

But Musk's history of overpromising and underdelivering should give any long-term investor serious pause, even if traders feast upon the stock's volatility caused by such broken promises.

And when it comes to investing, you don't have to buy what everyone else is buying to build your fortune. Plenty of stocks can double or triple – if you wait for the fat pitch.

Musk's String of Broken Promises on Self-Driving Cars

The biggest case in point for Musk's mastery of the bait-and-switch is the decadelong delay in full self-driving cars. Musk has literally been promising autonomous vehicles ("AVs") "in two years" in some form for more than a decade now. Look at this partial summary of broken promises:

• September 2013: "We should be able to do 90% of miles driven [autonomously] within three years."

• October 2014: "A Tesla car next year will probably be 90% capable of autopilot. Like, so 90% of your miles can be on auto."

• December 2015: "We're going to end up with complete autonomy, and I think we will have complete autonomy in approximately two years."

• May 2017: "I think [a driver will be able to sleep at the wheel in] about two years."

• April 2019: "I feel very confident predicting that there will be autonomous robo-taxis from Tesla next year."

After that string of failed predictions from as far back as 12 years ago, why should investors believe Musk when he continues making similar predictions this year?

• April 2025: "I predict that there will be millions of Teslas operating fully autonomously in the second half of next year."

• July 2025: "I think we'll probably have autonomous ride hailing in probably half the population of the U.S. by the end of the year."

It's understandable that, sometimes, companies can't hit their own milestones for new products or offerings. Things come up. Regulatory, logistical, or operational delays happen. And typically, management will address delays and reset investor expectations. But Musk is in a league of his own. In fact, Musk's string of overpromising is so outrageous that it has its own Wikipedia entry.

Of course, it's not like self-driving cars are some tiny project. They require an immense amount of hardware, expertise, and testing. They're a big, audacious goal with big, audacious results. A reliable autonomous vehicle would irrevocably shift transportation, and if Tesla is the leader of that revolution, then the stock may reward shareholders even further.

But, to date, we just haven't seen that yet. And for many investors, the shiny lure of robo-taxis is causing them to lose sight of Tesla's actual business today – making and selling electric vehicles ("EVs").

And in that arena, things could be going better....

Tesla's Car Sales Are Falling

Musk has been promising that AVs are just around the corner for 12 years. Yet Tesla's unit sales have been stuck in neutral – even reversing a little – over the past few years.

• 2022: 1.314 million

• 2023: 1.809 million

• 2024: 1.789 million

• 2025 (though Q3): 1.218 million

The trend for this year looks like a significant move backwards, judging by the year-to-date figures. And the headwinds are getting worse in 2025: fierce Chinese competition and the loss of a $7,500 EV subsidy, as part of President Donald Trump's One Big Beautiful Bill Act. Sales in Europe have been flagging this year, too, likely blowback from Musk's recent forays into American and European politics.

Meanwhile, self-driving rival Waymo is out on the streets and expanding its trials in even more U.S. cities, including Philadelphia, St. Louis, Pittsburgh, and Baltimore.

As it became more and more obvious that AVs weren't going to arrive in a year or two and that unit sales growth was slowing, Musk has shifted to somehow even more ambitious projects.

This shift has diluted Musk's focus even more, to projects that are even harder and farther off. That may be a bad set-up for operational success at the faltering car division, even if investors continue to cheer the promises of new aspirational endeavors.

Elon Musk's Newest Promise: Humanoid Robots

Perhaps Musk's biggest attention shifter is the introduction of Optimus humanoid robots. Musk trotted out the concept in 2021 and then debuted a prototype at the company's 2022 AI day.

Optimus is a bipedal robot with hands and arms that can interact with the environment. The plan is nothing if not big and audacious and game-changing. But it has to be, if Musk expects to capture the attention of investors. Musk needs a world-beater to support the stock.

Musk has called Optimus "a fundamental transformation for civilization." As the kids say: big, if true. Musk has also stated: "I think this will be the biggest product ever of any kind."

He may end up being wrong (or right), but you can't fault Musk for underselling his dreams.

Much like Musk's promises about self-driving cars, though, there was more than meets the eye at a rollout of the Optimus prototypes during an October 2024 Tesla event. According to a Bloomberg report after the event, humans remotely had controlled the robots for some tasks, though Musk made no mention of these helping hands during his remarks.

Still, Musk was confident enough at the event to tout the capabilities of the robot: "It can be a teacher, babysit your kids, it can walk your dog, mow your lawn, get the groceries, just be your friend, serve drinks. Whatever you can think of, it will do."

Tesla must have this kind of big idea if Musk hopes to have any shot at his trillion-dollar payday. His incentivized bluster helps the stock maintain its status of "ridiculously overvalued," to use the words of famed investor Michael Burry. Burry is known for making a ton of money on his bets against the U.S. housing market and his subsequent appearance in The Big Short book.

Musk's Potential $1 trillion Payday Means More Overpromising

The bait-and-switch element here is enabled by Musk's controversial prior pay package from years ago and his more recent comp agreement, which was approved just last month. The latest agreement could see Musk earn $1 trillion in newly issued Tesla stock.

While Musk earns a payout by hitting certain operational goals – delivering 20 million vehicles, 1 million robo-taxis, and 1 million robots – he's also paid if Tesla stock reaches certain thresholds.

For example, if Tesla stock sustains a market cap of $8.5 trillion in the next ten years, he'll earn the max payout for that objective. That would imply about 20% annual returns for the stock from today's price. Tesla stock already looks outrageously expensive. It's trading at nearly 300 times this year's estimated earnings and nearly 200 times next year's.

This valuation hasn't stopped Elon Musk from purchasing $1 billion in Tesla stock earlier this year.

His own payday relies on the stock going up. He can likely accomplish that in one of two ways (or even both):

1. Exponentially growing Tesla's fundamentals and dominating in emerging industries like autonomous driving and humanoid robots.

2. Continue to sell investors on a dream that world-changing breakthroughs are right around the corner.

Time will tell what Tesla is able to accomplish. But given Musk's history of making "optimistic" projections for new projects, this is a stock worth being cautions with. Recall that Munger quote about the power of incentives. at the top of this article.

Bottom Line

Could Tesla double or triple from here? Absolutely. When a stock's valuation becomes unanchored, it can rise far above its fair value. But if the company's fundamental performance doesn't match the stock's performance over time, it's a recipe for stock disaster.

Yes, it's true that Tesla has been wildly expensive (relative to actual earnings) for almost its entire history as a public company. And the stock has returned gains of tens of thousands of percent during that time. That has made it a beloved stock for traders and the Tesla faithful.

But if you consider yourself an investor, fundamentals and realistic future expectations of growth are what matter. Remember, you are a part-owner in a real business. And paying a fair price for that ownership always matters. All of that is why Tesla is a bit like playing with fire in today's market.

Plus, because there are no called strikes in investing, it's important to focus on the best opportunities.

Since the start of 2025, more than 700 stocks have doubled. That's incredible. And yet, says True Wealth senior analyst Brett Eversole, we're not done yet. His latest research shows a new pattern forming that could send today's record-high market soaring even higher.

He calls this pattern the "Melt Up Tsunami." And he has identified at least six stocks that could benefit, including one stock he says could not just double, but triple. He has named that stock in his new presentation, found here.

Regards,

James Royal

Editor's Note: Should investors prepare for an AI crash or buy the dips? Analyst and True Wealth editor Brett Eversole just posted a surprising answer. According to Brett's research, there's a pattern taking shape that could defy all the worst predictions about a bust. He's calling it a Melt Up Tsunami. And he has identified at least a half-dozen stocks that could benefit, including his #1 stock to own right now. He shares the ticker in this new presentation.