Elon Musk's AI Bot Says Tesla's Golden Period Is Over—Sees 15-25% Risk Of 'Death Spiral'

Elon Musk's own artificial-intelligence (AI) bot Grok has sounded a dire warning about the billionaire's EV maker Tesla Inc (NASDAQ:TSLA).

The company is in a "precarious position" currently and navigating one of the stormiest periods in its history, buffeted by multiple headwinds, including a sales slump, profit declines, a backlash against the brand, stock volatility, as well as political and regulatory risks due to Musk’s public feud with President Donald Trump, the chatbot said in response to questions from Benzinga.

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Tesla's "golden period" or era of peak success—defined by widespread brand admiration, solid government backing, soaring stock-market performance, and dominance in the EV industry—is likely over, it said.

Tesla didn’t immediately respond to Benzinga’s request for comment.

Tesla’s Golden Period Is Most Likely Over

The highest-probability outcome for the EV maker over the next 12-18 months is a "volatile but survivable period" characterized by ongoing difficulties, incomplete recovery, and a reliance on major milestones such as the robotaxi launch and new model rollouts, the bot said.

"Tesla faces intense pressure from falling sales, brand backlash, political risks, and operational hurdles, though its stock retains speculative support due to Musk's vision for autonomy and AI. The situation remains volatile, with no clear resolution to the Musk-Trump feud or competitive challenges," Grok said.

"Tesla's golden period is most likely over, with an 80-90% probability that the unique confluence of universal brand admiration, government support, stock-market exuberance, and EV dominance won't return," the bot added.

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Interestingly, this isn’t the first time Grok has made unflattering observations about topics related to Musk. Earlier this year, the chatbot reportedly pointed out the billionaire as one of the biggest spreaders of propaganda and misinformation on X.com.

Grok’s downbeat projections are at odds with the steadfastly bullish forecasts from well-known Tesla supporters such as tech-focused fund manager and ARK Invest CEO Cathie Wood and Wedbush Securities Managing Director Dan Ives.

Wood sees Tesla's stock surging to $2,600 per share by 2030, from around $327 currently, driven by its robotaxi platform and AI advancements. Ives predicts a $550 stock price and sees Tesla on a path to a $2 trillion valuation, driven by robotaxis, AI, and the upcoming Cybercab launch.

Worst Case: ‘Death Spiral’ Of Collapsing Sales, Brand Crisis And Plunging Stock

According to Grok, the worst-case scenario for Tesla would be a dangerous convergence of the key threats – including an extended market-share plunge, any regulatory and political aftermath of Musk's clash with Trump, continued brand damage, and an underwhelming robotaxi outcome – which could force the company into extreme financial distress.

"In this worst-case scenario, Tesla could face a death spiral: collapsing sales and market share, a plummeting stock price, regulatory roadblocks, a tarnished brand, and a failed pivot to autonomy and AI. The company could be forced into bankruptcy or a fire-sale acquisition by a competitor, effectively ending its status as a leading EV and tech innovator," the chatbot said.

Such a dire possibility would be far-fetched in the near term (12-18 months), given Tesla's strong financial reserves, Musk's highly successful track record, and the company's operational strengths, Grok said. However, the situation is "not entirely implausible", it said, assigning a 15%-25% probability to the event.

Best Case: Plausible But Unlikely

"The June 2025 robotaxi rollout and Musk's handling of political tensions will be pivotal. If either fails significantly, Tesla could slide closer to the catastrophic scenario, but it's more likely to face a prolonged period of volatility and partial setbacks rather than outright failure," the bot said.

Tesla's most optimistic forecast sees a robust rebound by mid-2026, fueled by a successful robotaxi launch in June 2025, an early affordable EV model boosting sales by 20-30%, renewed brand strength, mitigated political risks, and a stock rally to $400-$500, pushing its market cap to $1.2-$1.5 trillion.

However, "this scenario is plausible but unlikely due to the need for near-perfect execution across high-risk initiatives," the conversational AI bot said, assigning a lower, 15%-20% probability to the event.

Tesla: Biggest Risks

Below is a list of the key risks weighing on Tesla, according to Grok:

• Sales and profit slump: April 2025 saw European sales plummet 49%, with Sweden down 80.7% and France hitting a three-year low. Rising competition from BYD, up 59% in Europe, and Tesla's outdated lineup are key drivers. Globally, Q1 profits sank 71%, pointing to slowing demand.
• Stock market woes: Tesla's market value has plunged $470 billion from a December peak of $1.54 trillion, with a single-day drop on June 5 erasing $152 billion, fueled by Musk's feud with Donald Trump. The stock is down 18.5% YTD, trailing the broader market.
• Brand Crisis: Musk's role in Trump's Department of Government Efficiency (DOGE) and their feud has ignited protests. The "Tesla Takedown" movement has triggered demonstrations in Boston and Delray Beach, with reports of Tesla showroom attacks reflecting rising hostility.
• Regulatory Risk: Musk's criticism of Trump's EV tax credit repeal (a $1.2 billion annual hit to Tesla) has heightened fears of stricter regulations on autonomous driving and robotics. Trump's threats to pull government contracts from Musk's companies add another layer of uncertainty.
• Operational Struggles: Tesla is scrambling to roll out its robotaxi service, set to launch in June 2025 in Austin with just 10-20 vehicles. Concerns over Musk's divided focus on SpaceX, X, and other ventures have sparked speculation that Tesla's board is exploring a new CEO.
• Valuation Gap: Despite significant losses, Tesla’s $700 billion+ valuation remains largely driven by speculative optimism around autonomy and AI, rather than its struggling core EV business.

Mitigating Factors

On the other hand, several factors lessen the odds of Tesla facing an extremely negative scenario:

• Cash Reserves: With $30 billion in cash reserves as of early 2025, Tesla has a significant buffer to absorb financial hits from declining sales and to continue investing in R&D for robotaxis and new models.
• Capital Access: Tesla still enjoys access to a strong investor base, which provides avenues to raise funds through stock offerings or debt, ensuring liquidity.
• U.S. Market Strength: Tesla maintains a dominant 50% EV market share in the U.S. (2024) and a loyal customer base, helping to offset weaker performance in Europe (down 49%) and China. This stability minimizes the risk of a total market share collapse.
• Musk's Leadership: Musk has steered Tesla through past challenges, including Model 3 production struggles in 2018 and COVID disruptions in 2020, solidifying the company's global influence. His ability to pivot—whether through a potential reconciliation with Trump or renewed innovation—makes a leadership-driven collapse less likely.
• Robotaxi and AI Innovation: Tesla's June 2025 robotaxi launch in Austin, though limited to 10-20 vehicles, could reinforce investor optimism if it demonstrates meaningful progress. Meanwhile, Tesla's energy storage division (up 100% in 2024) and Optimus robot development diversify revenue streams, reducing dependence on EV sales alone.

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