If the gambit works, it will be a huge win for Tesla.

Elon Musk has shifted Tesla’s business model in a profound way, and there’s no guarantee the gamble will pay off for him or the electric vehicle manufacturer.

The Wall Street Journal detailed the profound shift in the company’s modus operandi under Musk in recent years, from a company that reinvented existing technology to create the most iconic EV brand, to a company that is banking on unproven technology and AI to cement its future and legacy.

When Tesla began, EVs weren’t seen as viable or effective, they struggled to achieve a viable range, and they were heavy, slow, and clunky. However, the company’s adoption of lithium-ion batteries, which were primarily used in laptops, changed all of that and gave the company a leg up on competitors in its early days.

Now, Musk has the company wading into uncharted — and controversial — waters with its forays into fully self-driving cars. Where the lithium-ion battery was an existing technology waiting to be properly deployed, the company’s AI and self-driving systems are unproven, and they may be further away from full-blown implementation than Musk and his fans think.

On top of the risks that come with a technology like AI being used for fully driverless cars, Musk’s proposal to use driverless cars for rideshare services would take away potential income for drivers who rely on ferrying passengers to make a living while boosting the profit margins for Musk and Tesla as they wade into those waters. On the other hand, it could reduce costs for these services in the long run.

In any case, the gamble is significant. Tesla’s current Full Self-Driving feature has been the subject of investigations by the U.S. Government due to accidents caused by the feature. Meanwhile, Tesla owners continue to share disturbing footage of technological failures by the software. System errors from FSD features also led to traffic fines for owners in China.

On top of that, the current iteration of self-driving is described as “a glorified cruise control” by the Journal — and while that may be a harsh perception, given how many others have been impressed, it’s nonetheless a far cry from the fully automated vehicles Musk is banking on.

Tesla’s initial rollout of fully robotic cars will be small, but the company is hoping to have millions of them on the road by 2026.

If the gambit works and the tech’s safety eliminates all possibility for collisions with pedestrians — recent testing in Texas led to a test dummy being struck multiple times — it will be a huge win for Tesla. If it doesn’t, it could spell big trouble for a company whose stock price has been incredibly volatile in the first half of 2025.

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