He called the success of Tesla's EV "amazing." That could also be its downfall.

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If a self-driving future is one pillar of Tesla's (TSLA) “excellent” market valuation, electric cars that are cheap enough for most households are another.

But changes from within and outside the company are rapidly complicating that vision.

Tesla's stock price relies in part on its mass-market EVs, which are leading a paradigm shift in how much of the country gets around.

However, rising prices for cars, especially EVs, are reducing consumer demand and lengthening implementation timelines.

While governments around the world begin to steer societies toward electric vehicles, traditional automakers are readjusting their timing to adapt to waning demand. Several major companies, including Ford (F) and General Motors (GM), have recently scaled back their EV plans, while others have begun moving to hybrid vehicles.

Tesla, a pure EV automaker, doesn't have that option. We are in a position to lead on the way up and lead on the way down.

Just as competitors are leaning toward cheaper hybrids and better-selling gasoline models, Tesla is pivoting away from its long-anticipated entry-level EV and establishing itself as a luxury automaker. It seems there is.

At the same time, resources from the affordable Model 2 EV project were allocated to the monumental robotaxi program.

The market hasn't responded favorably since the debut of the low-cost car was meant to define Tesla's next era. On Thursday, the stock price fell further after Deutsche Bank downgraded the company's stock from “buy” to “hold” due to the risk of delays or suspension of service for mass-produced vehicles in favor of an unproven robotaxi business.

Many observers saw Tesla's entry-level car as its ticket to profit growth and a solution to sluggish sales. Shares have fallen nearly 40% this year due to increased competition, an aging lineup and weak demand for EVs.

Against an increasingly pessimistic backdrop, the Model 2 was intended to be a sparkling answer to Tesla's short-term woes. But barring some bold entry-level steps to reinvigorate Tesla's finances, the company's challenges appear to be more than temporary. For some analysts and investors, Tesla has no future without the Model 2.

The shift in focus from the Model 2 to self-driving cars is clear, reflecting the indecision that plagued Apple's recently stalled car project, which wavered between its Tesla-inspired EV business and self-driving technology. are doing.

musk seemed to be enjoying it But he may end up repeating Cupertino's mistake of pursuing autonomous ambitions instead of sticking to core competencies.

There's also Tesla's safety record.

Earlier this month, the company settled a wrongful death lawsuit brought by the family of a Silicon Valley engineer who died when his Model X, with Autopilot activated, crashed into a barrier on a busy highway. The incident raised questions about consumer perception and reliance on self-driving technology. Last year, the U.S. Department of Justice launched an investigation into how Tesla and Musk promote driver-assistance systems.

The idea of driving without human intervention has played a key role in Tesla's technology-enabled growth story. But what if it's the only part?