In a podcast published on 2026-09-07, Dave discusses Tesla's growth trajectory, specifically addressing concerns about recent stagnation and future prospects.
**Past Growth Challenges & Shifting Focus:**
* Tesla previously aimed for ambitious production goals of 10 million and then 20 million vehicles per year.
* However, the company's focus appeared to shift towards robotaxis and Full Self-Driving (FSD), leading to a perceived halt in talking about high-volume vehicle growth.
* This shift resulted in a lack of revenue growth, as Tesla has traditionally relied on vehicle sales.
* Robotaxi network growth has been slow since its initial release in Austin last year, and while Tesla Energy shows promise, it's not yet on par with vehicle revenue.
* The market anticipated a more affordable, next-generation vehicle. Rumors of its cancellation emerged, followed by Tesla's denial.
* Eventually, Tesla introduced the standard Model Y and Model YL, which Dave found "disappointing" as many expected a fundamentally new, high-volume, affordable model.
* This confusion led some to speculate that Tesla might eventually stop selling cars to consumers, going "completely in" with commercial ride-hailing services. Dave believes these conclusions are misguided, asserting that Tesla is still pursuing high-volume, affordable consumer vehicles, but through a different strategy.
**Elon Musk's "Bold Decision" and its Rationale:**
* Dave speculates that around two to two and a half years ago, Tesla management, including Elon Musk, faced a critical decision:
* **Option 1:** Go "all in" with FSD and develop a custom "new paradigm" car (CyberCab) built entirely for AI driving, with no human steering or driving options. This was highly uncertain due to FSD readiness and regulatory timing.
* **Option 2:** Develop a smaller, more affordable Model Y or Model 3 (~$30,000) with a steering wheel and pedals, offering FSD as an option, to drive immediate volume and revenue. Dave believes most CEOs would choose this path.
* Dave suggests prototypes for both likely existed.
* Elon Musk reportedly made the "bold decision" to "axe" the program for the smaller, affordable Tesla with a steering wheel, a move Dave acknowledges most would consider "stupid" or "incompetent."
* **Elon's perceived reasoning (according to Dave):**
* A vehicle with human controls is "drastically more complex" than the CyberCab, adding "extra baggage" like speedometers, pedals, airbags, and mirrors.
* For a large company, splitting focus across too many "super important new vehicle programs" leads to "mediocrity" and a lack of "urgency."
* Having a "backup plan" (the affordable car with a steering wheel) diminishes the "make it or break it" focus needed for CyberCab and FSD, which Elon saw as crucial for the company's survival and innovation.
* Dave draws a parallel to the LLM AI wars, where focused startups like OpenAI and Anthropic outperformed diversified tech giants like Google due to laser-like focus.
* Elon wanted to combat "complacency" and ensure Tesla's purpose remained leading AI-driven transport, not just making human-driven cars.
* This decision, while increasing short-term risk (no backup, potential stock impact), aimed to create a "laser focus" and "intensity" akin to a startup, leading to better products and a stronger long-term future.
**Mitigation Efforts & Roadmap for the Future:**
* Dave believes Tesla tried to mitigate short-term risks with the Cybertruck, aiming for 250,000 units, but it faced high costs and lower-than-expected demand due to price and charging issues. The standard Model Y and YL also helped demand but didn't meet high-growth expectations.
* **Dave outlines Tesla's future roadmap, starting with Elon's decision, in six steps:**
1. **Define the new paradigm in transport:** Visualize a future with AI-driven cars, no driver controls, designed for the "rider," emphasizing comfort and entertainment, and built backwards from this vision.
2. **Create the software and vehicle:** Develop FSD that is safer than human driving and a vehicle (CyberCab) designed from the ground up without driver controls, utilizing "unboxed assembly," fewer parts, and more efficient manufacturing.
3. **Prove this out:** Implement a robotaxi network in geo-fenced areas (like Austin), controlling all aspects of operation to build a safety case and test manufacturing processes.
4. **Pass regulations:** Obtain necessary approvals for a car without driver controls to be sold to consumers.
5. **Sell to consumers:** Launch the CyberCab as an "amazing monumental shift," an "super affordable" car that is the "first car of this new paradigm."
6. **Build a new lineup:** Scale this paradigm across various vehicle types (small, medium, large, sedans, SUVs), all rider-focused and AI-driven, leading to Tesla's ambitious 10-20 million vehicle per year production goals.
**Conclusion & Outlook:**
* Dave acknowledges the "short-term pain" for Tesla (Cybertruck volume, lack of new affordable car, flat revenue, stock struggles) as the "cost of this bet."
* However, he argues that Tesla is uniquely positioned as the "only car company out there at scale" that has released a "next generation" paradigm vehicle (CyberCab) that is "actually happening in reality" in Austin, Texas.
* If Tesla successfully executes on safety, manufacturing, and AI software, this strategy will unlock the "next era of high growth" and a "whole host of various types of vehicles," leading to a "new era of Tesla vehicles."
* While many will doubt Tesla's growth, Dave believes "everything is just getting started for Tesla," and Elon's plan "could surprise people," potentially being seen as "genius" in retrospect.