The Rabid Capitalist

Professor Glenn A. Okun

Last week, Elon Musk unveiled the Tesla Roadster. It is another in a long line of stage-worthy product introductions by Tesla that inevitably will not be introduced as a commercial product. Will investors continue to blindly follow this era’s P.T. Barnum?

Barnum would have admired the staging. On October 15, the new Roadster appeared in a cloud of compressed air at SpaceX’s rocket test site in McGregor, Texas. It was Mr. Musk’s personal brand distilled to a single evening: an epic announcement packed with grandiose promises, and a magic act that kept the audience staring at the smoke while the real trouble happened backstage. Backstage, at headquarters, Elon is surrounded by misfit toys: a humanoid robot with a repeatedly delayed reveal, a Cybercab production line devoid of meaningful units in service, and a “Full Self-Driving” system that still requires human supervision that is nearly a decade overdue.

The Greatest Show on Earth

The Roadster demonstrated its novel but useless things capabilities. It raced upside down, clinging to a giant inverted ramp like a Hot Wheels toy. It hopped over a Model 3, a Model Y, a Cybertruck, a Tesla Semi and a Cybercab. It flipped in midair and floated back to earth on air thrusters, landing on all four wheels and momentarily disappearing in a puff of gas.

What the Roadster did not do was provide a price, or a credible delivery date. Mr. Musk’s latest toy is the most literal case of vaporware in the history of technology: a product you cannot buy, propelled by actual vapor.

Step Right Up

Tesla’s status as a technology company is largely limited to its valuation multiple. The firm’s primary function has been to issue press releases proclaiming bold innovations, and those assertions have mostly been unfulfilled promises.

Year	The promise	Where it stands, October 2026
2010	An electric car	Delivered. The Model S and its successors are real cars that real people drive. The one genuine success.
2016	A driverless car	Every Tesla was said to have the hardware for full autonomy. The software is still sold as “Full Self-Driving (Supervised).”
2016	A $25,000 EV	Never built. The cheapest Model Y and Model 3 trims remain well above that mark.
2017	A roadster	Unveiled for a second time last week. Production: “2028, actually.” No price.
2019	A robotaxi service	A small geofenced service in Austin, Dallas and Houston, with roughly 17 cars across all three cities as of April.
2023	A robot car	Cybercab production began at Giga Texas in April; Musk himself warned the ramp would be “agonizingly slow.”
Mid-2023	Artificial-intelligence services	Tesla disbanded its Dojo supercomputer team in 2025; AI remains a narrative rather than a revenue line.
2024	A robot car-sharing service	Owners still cannot add their cars to a Tesla robotaxi network.

With a record of one actual success out of eight announced radical innovation “triumphs,” one would have expected Tesla’s credibility to have been destroyed. As subscribers can see in the chart below, the company’s reputation has been damaged, but not yet ruined.

Friday’s trading was a case study in the Barnum effect. Tesla shares jumped almost five percent in the premarket on the strength of the overnight spectacle. By the closing bell, the audience had filed out of the tent and dumped the stock, finishing the day down over two percent, at $354.72. Through the start of October, the shares had lost more than fifteen percent of their value this year.

Tesla has also surrendered much of the gain associated with the 2024 presidential election. There are good reasons to believe that President Trump’s policies will hurt the company. His electric vehicle (“EV”) policy canceled the $7,500 federal EV tax credit as of September 30, 2025, raising the effective price of every Tesla sold in America. The same legislation eliminated the fuel-economy penalties that once forced rival automakers to buy Tesla’s regulatory credits, a high-margin revenue source the company has quietly depended on for years. Tesla cited lower regulatory-credit revenue as a drag on second-quarter operating income.

The deliveries tell the same story. Tesla delivered 486,532 vehicles in the third quarter, beating Wall Street’s estimate but falling about two percent from the record 497,099 in the same quarter last year, when buyers rushed to beat the expiration of the tax credit.

Then and Now

The Roadster pales in comparison to Musk’s promises. In 2017, he stated that it would sprint from zero to sixty miles per hour in 1.9 seconds, go 620 miles on a charge, seat four, cost $200,000 and reach customers in 2020.

Tesla Roadster: promise versus reality

	Promised in 2017	Revealed in 2026
Range	620 miles	“Over 300 miles”
Seating	Four (2+2)	Two; the Rocket version seats one
0–60 mph	1.9 seconds	Under 1.6 seconds (Performance); under 0.9 seconds (Thrust)
Price	$200,000 base; $250,000 Founders Series	Not announced for any version
Customer deliveries	2020	Production in “2028, actually”
Deposit	$50,000	$50,000 ($5,000 now, $45,000 within 10 days)

Sources: Tesla, Electrek (Oct. 15, 2026), Finviz/Zacks.

Several versions of the Roadster may not be driven legally on a road. Asked whether the car would be street legal, Mr. Musk replied, “Yeah, yeah. Depends on your street.” As Scott Miller, an aviation lecturer at San Jose State University, reminded Wired, the Federal Aviation Administration has jurisdiction over any machine that leaves the surface of the earth. Meanwhile, the high-pressure carbon-fiber tanks Tesla has packed into every available void in the car are a cousin of the vessels implicated in several SpaceX rocket failures, as TechCrunch noted.

A Sucker Born Every Minute

Behind the smoke, the fundamentals are deteriorating. In the second quarter, Tesla’s revenue rose twenty-six percent to $28.24 billion, yet operating income fell fifty-seven percent to $398 million, an operating margin of just 1.4%. Capital spending jumped one hundred and forty-two percent to $5.79 billion, and free cash flow was negative $1.09 billion. Tesla trades at roughly 270 times annualized quarterly earnings, a valuation that relies on Musk’s unfulfilled promises of robots, robotaxis and AI. Ford and General Motors, which actually sell cars at a profit, trade at a small fraction of that multiple.

The Show Must Go On

Some Tesla shareholders now openly hope a merger will rescue a stock whose automotive business is stalling. A Tesla-SpaceX merger may simply defer the day of reckoning for shareholders.

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