2025 is shaping up to be a crucial year for Tesla, with its success hinging on whether it can deliver breakthroughs in autonomous driving technology or face mounting financial and competitive pressures.

The outcome largely depends on Tesla's Full Self-Driving (FSD) technology, which Elon Musk has promised will enable fully autonomous driving by the end of the year, potentially revolutionizing Tesla's market standing.

Tesla continues to invest heavily in both hardware and software development for FSD, despite not generating enough revenue from this technology, which is putting pressure on its profit margins.

If Tesla manages to launch a mass-market, unsupervised FSD system successfully, it could lead to a surge in demand, a 30% increase in production, and quarterly vehicle deliveries exceeding 500,000, possibly resulting in higher margins and new factory expansions.

Failure to deliver on FSD could cause Tesla's sales to stagnate, especially as US EV tax incentives decline and European and Chinese markets become more competitive, threatening its growth.

Tesla's US sales declined sharply in Q2 2025 compared to previous years, amid rising global non-Tesla EV sales, raising concerns about its future growth and potential crisis.