Tesla and Toyota Are on Two Different Paths
Toyota is selling the present, while Tesla is selling the future — an arguably really far-flung version of the future.

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One is selling the present, the other is selling the future — an arguably really, really far-flung version of the future.
On Thursday, Toyota announced it had sold 10.8 million cars in 2024, locking in its status as the world’s top carmaker for the fifth straight year — all while battery electric vehicles account for less than 2% of its total sales. Tesla, meanwhile, came in under expectations in its earnings report on Wednesday and didn’t seem to want to talk about electric vehicles at all. Or, at least, not the type that us regular ol’ humans can drive.
King of the World
Toyota won 2024 in part by leaning into the high demand for hybrid vehicles in the US and Europe, selling 4.2 million of the vehicle type (for reference, Tesla sold just under 1.8 million cars overall last year). In other words: Toyota is meeting the market where it is.
Tesla, too, spent the year trying to geolocate the market — and begrudgingly shifted to affordability. The company pointed to a drop in average sales price to explain in large part why its net income fell 71% in the fourth quarter and 53% for the year. Overall, revenue from its core automotive business fell 8% year-over-year in the final quarter.
So what explains Tesla’s roughly $1.1 trillion market cap lead over Toyota? Tesla’s positioning as a post-combustion engine automaker certainly helps (though BYD outsold it by more than 2:1 last year). And now the company is portraying itself as a winner of the post-human future too — spending considerable time Wednesday hyping its promised robotaxi and humanoid robot products.
And, of course, a bet on Tesla is a bet on CEO Elon Musk as galactic ruler with an office in the White House, though none of that seems to be especially helpful at the moment:
- Roughly 30% of Tesla’s $2.3 billion profit in the quarter could be attributed to regulatory credits, which Trump 2.0 says could soon go bye-bye (paper gains on bitcoin holdings accounted for another $600 million of its profit). Meanwhile, as much as 25% of the parts used in its US-made cars come from Mexico, which could soon be subjected to tariffs as high as 25%.
- On the other hand, Musk’s political power could help Tesla secure key regulatory exceptions for its promised line of robotaxis — especially for its Cybercab, which features no steering wheel or gas or brake pedals. Musk has called for a national approval process for self-driving cars, instead of the current state-by-state framework.
Epic Flail: Investors are buying the hype: Tesla’s share price rose 3.5% Thursday, after a 5% climb after-hours Wednesday. Which prompted considerable confusion from JPMorgan analysts, who wrote in a note to investors they were “not clear why” the jump happened, though they said it may be “related to management guidance for 2026 (no financial targets were provided, but it was said to be ‘epic’) and for 2027 and 2028 (‘ridiculously good’).” We’re sensing some sarcasm.