When Tesla Shakes, Korea Rises: How the EV Giant’s Struggles Opened New Doors for Korean Tech and Battery Leaders

📌 [Part 1] The Light and Shadow of Tesla — Why the “Icon of Growth” Is Shaking

As of 2025, Tesla, Inc. remains one of the most closely watched companies in the world.

Just a decade ago, electric vehicles (EVs) were viewed as “eco-friendly niche products.”

Tesla changed that narrative, making EVs the centerpiece of global mobility and redefining the entire automotive paradigm.

But the Tesla of 2025 is not the Tesla of the past.

Once the ultimate symbol of innovation, the company now faces a mix of slowing growth, eroding profitability, and intensifying competition — pressures that demand its “next stage of evolution.”

As of October 2025, Tesla’s stock trades around $456, showing little year-to-date progress and moving in repeated correction cycles.

While its market capitalization still hovers near $1 trillion, the market’s tone has turned more skeptical.

The issue is not a temporary dip in earnings but rather the structural fatigue of Tesla’s growth model.

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1️⃣ Slowing Sales — The First “Brake Signal” for the World’s Largest EV Maker

In Q1 2025, Tesla delivered 336,000 vehicles to customers — an 8% decline year-over-year.

For a company that maintained 40–50% annual growth since 2020, this marks its first real contraction.

The sharpest decline came from China, a crucial market that accounts for over 30% of Tesla’s global sales.

According to the China Association of Automobile Manufacturers (CAAM), Tesla’s February 2025 China sales fell to 53,000 units, down 49% year-on-year — a dramatic slump that rippled through its global balance sheet.

The reasons are clear:

🔸 1. The rise of local competitors

Chinese automakers such as BYD, NIO, and XPeng are closing the gap rapidly.

BYD alone sold 760,000 vehicles in Q1 2025 — more than double Tesla’s volume.

Mid- to low-priced models like the Seagull and Han EV have dominated the domestic market, entrenching the view that “Tesla is an expensive brand.”

🔸 2. The backlash of aggressive price cuts

From late 2024 to early 2025, Tesla slashed prices six times.

In the U.S., the Model 3 dropped from $46,000 to $38,000,

and in China from 250,000 yuan to 210,000 yuan.

Instead of boosting demand, consumers began delaying purchases in anticipation of further cuts — a case where “price wars killed urgency.”

As a result, Tesla’s gross margin plummeted from 29% in 2022 to 17% in 2025.

Though still above the industry average, the once “superior profitability” that defined Tesla has largely vanished.

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2️⃣ Eroding Profitability — “More Sales, Less Money”

On the surface, Tesla’s Q3 2025 results appear respectable:

$25.8 billion in revenue and $2.9 billion in net profit.

But a deeper look reveals structural cracks beneath the numbers.

Revenue grew a mere 2% year-over-year, while net income fell 14%.

In other words, Tesla sold more but earned less per sale.

The main culprit is shrinking margins.

The average selling price per vehicle dropped from $55,000 in 2022 to $42,000 in 2025,

while costs for materials (lithium, nickel), logistics, and labor all climbed.

EPS came in at $1.96, missing market expectations of $2.08,

and the stock fell 5.4% in after-hours trading.

It wasn’t just disappointment — it was a warning that Tesla’s “premium valuation thesis” is losing ground.

> Bloomberg Intelligence noted:

“Tesla has reached a point where manufacturing efficiency alone cannot protect profitability.

Unless its AI, robotaxi, and energy divisions begin generating real revenue,

the slowdown in its core automotive business will become inevitable.”

Simply put, Tesla’s future now depends not on how many cars it sells —

but on whether its new businesses can start making real money.

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3️⃣ The Challenge to Its Technological Edge — No Longer “Untouchable”

Back in 2019, Tesla’s technology lead was undisputed —

battery innovation, software integration, over-the-air updates, and self-driving systems were a generation ahead of competitors.

By 2025, that gap has narrowed sharply.

🔸 BYD’s offensive

BYD’s Blade Battery, launched in 2024, spread rapidly through production lines.

Its energy density (Wh/kg) nearly matches Tesla’s 4680 cells,

yet its production cost is about 30% lower.

In addition, BYD’s control over its own lithium and manganese mines gives it a long-term cost advantage.

🔸 Hyundai–Kia’s rapid rise

South Korea’s Hyundai Motor Group has been gaining European market share with its E-GMP platform.

The IONIQ 5, EV6, and EV9 all ranked among Europe’s top 10 EVs in early 2025.

Their 800V/350kW ultra-fast charging beats Tesla’s charging speed,

and the interior quality and design have been praised as class-leading.

🔸 U.S. rivals catching up

Ford and Rivian are chipping away at Tesla’s dominance in the EV truck and SUV segments.

Rivian’s R1T is now rated as the “most satisfying electric pickup” in North America,

contrasting sharply with Tesla’s delayed Cybertruck.

The once sacred equation — “EV = Tesla” — has been broken.

Now, Tesla is simply “one of many EV makers.”

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4️⃣ The CEO Risk — Elon Musk: Genius or Liability?

Tesla’s greatest non-financial volatility factor is its CEO, Elon Musk.

He remains one of the most charismatic founders in corporate history,

but also one of the most unpredictable variables for investors.

Since acquiring Twitter (now X) in 2022, Musk has been at the center of constant controversy —

from political statements to AI debates and election commentary —

his tweets still have the power to move markets, but increasingly in unintended ways.

In 2025, he introduced Grok, a ChatGPT competitor from his AI startup xAI,

calling it “AI for human freedom.”

Yet his outspoken anti-regulation and anti-ESG stance alienated segments of the investor and consumer base.

According to Morning Consult, Tesla’s brand favorability in the U.S. has fallen 13% since 2022,

with the decline most pronounced among younger consumers (ages 18–34) —

a demographic increasingly associated with “Anti-Musk sentiment.”

This isn’t just a PR issue; it’s a structural risk that may impact future loyalty and purchase intent.

Moreover, Musk’s foray into politics and polarizing discourse has led institutional investors

to question his management focus.

Some pension funds and ESG-oriented funds have trimmed Tesla holdings by 0.3–0.5 percentage points in 2025.

In short, Musk remains Tesla’s greatest asset — and its greatest uncertainty.

His vision still commands headlines,

but his unpredictability now casts a longer shadow than his genius.

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🔚 Conclusion — “Tesla at a Crossroads: The Genius on Trial”

Tesla still sits atop the EV world.

But its throne is far less secure than before.

Sales are slowing, margins are thinning, and competitors are accelerating.

Musk’s words still move markets, but increasingly as a source of risk rather than inspiration.

Yet, Tesla’s story is far from over.

It remains the benchmark of EV technology,

and its push into AI, robotics, and energy carries immense long-term potential.

But faith alone no longer sustains its valuation.

> The Tesla of today is not “the myth of innovation” —

it’s a company fighting a real-world battle to sustain innovation itself.

Whether Tesla reclaims its former dominance,

or becomes just another large-scale automaker,

will be decided by what happens after 2025.

📌 [Part 2] Tesla After Tesla — New Businesses, AI, and the Limits of Reality

Tesla is not just a car company.

It is an innovator in the EV industry, a software powerhouse, and a symbol of the AI age.

But in 2025, Tesla faces new questions — different from those that defined its peak years.

> “Is innovation still happening?”

“Can Musk’s grand promises turn into tangible profits?”

As the stock wavers, the market’s central question is no longer about vision —

it’s about execution.

> “Can Tesla actually turn those massive promises into revenue?”

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1️⃣ Robotaxis and AI — “The Hype Is Real, but the Money Isn’t (Yet)”

Tesla’s next big dream is the Robotaxi —

a fleet of fully autonomous vehicles that generate income without drivers.

In 2024, Musk boldly declared at the investor day event that

Tesla would launch commercial Robotaxi services by 2025.

But reality, as it turns out, is far more complicated.

▪ Regulation moves slower than technology

The U.S. National Highway Traffic Safety Administration (NHTSA) still hasn’t approved

Level 5 full self-driving (FSD) for commercial operation.

As of 2024, urban autonomous driving programs were permitted only in limited regions —

such as California and Arizona — under strict safety conditions.

Key issues such as legal liability, insurance frameworks, and infrastructure standards remain unresolved.

In short, technology is outpacing social consensus.

Tesla promised an era where “cars make money on their own,”

but the project remains stalled at the intersection of innovation and regulation.

▪ The limits of Dojo — between ambition and reality

Tesla’s AI ambitions rest heavily on its Dojo supercomputer,

a machine-learning infrastructure designed to process

tens of billions of images and sensor inputs collected from vehicles.

As of mid-2025, Dojo’s performance is estimated at around 340 PFLOPS —

a significant achievement, but still below NVIDIA’s B200 Blackwell cluster,

which delivers over 1 EFLOP.

Tesla’s vision of breaking free from NVIDIA’s ecosystem

and building a fully independent AI infrastructure remains in the testing phase,

both in terms of computational power and cost efficiency.

The bigger issue is monetization.

Tesla pours billions of dollars annually into AI development,

yet the results have not translated into meaningful revenue streams.

Investors are increasingly asking:

“When will this technology start to generate profits?”

> The completion of technology is one thing.

But markets move on when the technology makes money.

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2️⃣ The Energy Business — “Growing Fast, but Still a Side Act”

Tesla’s long-term vision is to evolve from “a carmaker” to “an energy company.”

Its Energy Generation & Storage division includes solar panels, Powerwall units, and Megapack grid systems.

In 2025, Tesla’s energy revenue reached $5.4 billion,

up 28% year-over-year.

The growth rate is impressive, but the division still accounts for less than 20% of total revenue.

In other words, if the automotive segment falters, the energy business cannot yet fill the gap.

▪ Becoming an energy company takes time

Energy storage is not a quick-profit business — it’s a long-term stability game.

Large-scale projects such as grid installations, power plants, and corporate energy systems

generate consistent maintenance and data service income over 10–15 years.

However, entering this field requires massive upfront investment and time-consuming approvals.

To dominate the sector, Tesla needs three things:

1️⃣ A stable supply chain,

2️⃣ Competitive battery pricing, and

3️⃣ Policy incentives in key markets.

At present, Tesla is still in what analysts call “the potential phase” —

a business with great promise, but not yet consistent profitability.

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3️⃣ Market Sentiment — From “Innovation Stock” to “Prove-It Stock”

Tesla’s valuation has always represented more than its car sales.

For years, it served as the market’s barometer of faith in the future.

But faith alone is no longer enough.

As of late 2025, the average analyst price target sits around $490,

only about 7% above the current level.

J.P. Morgan projects a “volatile, directionless six months” ahead,

expecting Tesla to move in a sideways “box range.”

On the other hand, Wedbush Securities maintains a bullish view:

“If the Robotaxi project translates into real revenue,

Tesla’s valuation could be re-rated above $600.”

The wide divergence in forecasts is itself a warning.

When opinions spread this far apart, it means the market is uncertain.

Tesla is no longer seen as an unquestioned growth stock —

it is now a proof-driven enterprise that must justify its story with data.

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4️⃣ The Investor’s Perspective — “No Longer About Faith, but About Data”

Tesla remains at the heart of the future economy.

But it is no longer the “stock of conviction” it once was.

Today, it is the stock of verification.

From 2020 to 2023, its meteoric rally was built on belief —

a collective faith in Musk’s vision and the inevitability of electrification.

By 2025, that narrative has shifted:

investors now demand proof that Tesla can turn technology into profit.

Three metrics now define Tesla’s investment case:

1️⃣ Vehicle delivery growth exceeding 20%

→ Without a clear rebound in core EV sales, other business lines will struggle to shine.

2️⃣ AI and Robotaxi monetization

→ Billions in AI investments must convert into recurring subscription or service revenue.

3️⃣ Margins returning to the mid-20% range

→ Ultimately, technology must translate into profitability, not just engineering milestones.

Only if these three conditions are met can Tesla reclaim its place

as the centerpiece of the tech stock rally.

Otherwise, the debate over its overvaluation will reignite — louder than before.

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🔚 Conclusion — “Tesla Is Still the Future, but the Future Isn’t Free”

Tesla remains the heartbeat of the electric vehicle industry.

But every revolution eventually faces a test of sustainability.

Competition is fiercer. Regulations are thicker.

And new frontiers — AI, robotaxis, and energy —

are moving slower on monetization than on hype.

Still, Tesla’s story is far from finished.

It continues to set the direction of the industry,

with competitors worldwide moving faster because of Tesla.

Whether Musk’s promises — the Robotaxi era, AI-driven autonomy, Dojo commercialization —

materialize sooner or later will define not only Tesla’s next decade

but the balance of power in the global EV industry.

Tesla’s recent weakness is not collapse —

it is a period of structural recalibration.

Investors must now base their judgment not on emotion,

but on evidence, margins, and execution.

> Tesla is still the name of the future.

But the future no longer comes free.

In this new era, survival requires proof.

📌 [Part 3] In Tesla’s Shadow — How Korean Companies Are Turning Weakness Into Opportunity

As Tesla’s stock stumbled through 2025, many investors jumped to the same conclusion:

> “Is this the end of the EV boom?”

But that interpretation is only half right.

Tesla’s slowdown does not mean the electric vehicle industry itself is shrinking.

In fact, it marks the beginning of “the post-Tesla era,”

a phase of diversification and regional rebalancing in the global supply chain —

and Korea is one of its biggest beneficiaries.

Tesla’s struggles represent more than one company’s setback;

they reflect a shift in power across the world’s EV ecosystem.

And that shift is quietly creating new opportunities for Korean manufacturers, material suppliers, and semiconductor leaders.

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1️⃣ The Battery Market — The Myth of “Tesla Downturn = Industry Crisis”

Tesla’s weak sales inevitably caused short-term disruptions.

In Q2 2025, Model Y and Model 3 production fell from 320,000 units to 290,000,

a 9% decline, which led to an estimated 7% reduction in LG Energy Solution’s (LGES) North American supply volume.

Yet, global EV demand continues to expand.

According to SNE Research (2025), worldwide EV battery installations rose 32% year-over-year.

The lost Tesla demand was more than offset by GM, Ford, Hyundai, Rivian, and Volkswagen,

who quickly filled the gap.

In other words, Tesla’s weakness signals not contraction but redistribution of market share.

The EV market is no longer a one-brand story — it is a balanced ecosystem with multiple strong players.

Korea’s “Big Three” battery makers — LG Energy Solution, Samsung SDI, and SK On —

used this shift to their advantage.

They have diversified away from Tesla dependency,

building new joint ventures with OEMs worldwide.

LGES expanded partnerships with GM, Rivian, and Hyundai;

Samsung SDI focused on high-nickel premium cells for European luxury automakers;

and SK On strengthened its presence in the U.S. SUV and truck segment through its Ford alliance.

By Q3 2025, Korean battery makers’ combined global market share reached 28.5%,

up 2.2 percentage points from a year earlier.

Their dependence on Tesla fell, but their influence in the global EV value chain actually grew.

This is not a retreat — it’s a rebalancing.

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2️⃣ Semiconductors and HBM — “Cars Are Now Computers on Wheels”

Regardless of Tesla’s sales, the auto industry itself is transforming into a data-driven business.

As autonomous driving, ADAS, and AI-driven mobility algorithms become standard features,

the demand for automotive semiconductors is surging.

TrendForce projects that the market for AI automotive chips will grow from $4.2 billion in 2025

to $10.5 billion by 2027 — more than doubling in just three years.

At the center of this revolution are HBM (High Bandwidth Memory) chips and AI GPUs.

Autonomous vehicles process hundreds of gigabytes of data per second,

requiring high-speed memory bandwidth to keep up with AI inference workloads.

As of 2025, global HBM market share is as follows:

SK hynix 53%, Samsung Electronics 38%, Micron 9%.

Together, Korean chipmakers control roughly 90% of the world’s HBM supply.

This dominance won’t change regardless of Tesla’s own AI ambitions.

Even if Tesla’s Dojo project succeeds in developing proprietary AI chips,

the HBM modules, packaging, and advanced materials inside those chips

will still come from Korean suppliers.

In other words, Tesla’s turbulence only underscores Korea’s strategic importance.

The real growth engine lies not in who sells the car,

but in who enables the intelligence inside it.

In the new automotive landscape, cars are less about metal and more about data —

and HBM memory is the beating heart of that transformation.

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3️⃣ Battery Materials — “The Real Battlefield Is Now the Raw Materials”

Tesla’s aggressive price cuts were not just a marketing tactic.

They ignited a cost war across the entire battery industry.

Cheaper cars require cheaper batteries,

and cheaper batteries require cheaper materials.

This shift plays directly into the hands of Korean materials companies.

POSCO Future M, EcoPro, and L&F have all signed long-term supply agreements (LTAs)

with major U.S. and European OEMs.

A standout example is POSCO Future M,

which agreed to supply 120,000 tons of cathode materials annually through 2030

to the GM–Samsung SDI joint plant in Ohio.

This partnership not only diversifies away from Tesla

but also secures eligibility for IRA (Inflation Reduction Act) tax credits in the U.S.

In short, Tesla’s slowdown has allowed Korean suppliers

to free themselves from single-client dependence and expand globally.

As the EV industry shifts from a unipolar Tesla system to a multipolar OEM network,

Korea’s materials sector is converting structural change into profit.

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4️⃣ Energy Transition and Recycling — “Even When EV Sales Slow, Batteries Still Make Money”

A slowdown in EV sales no longer spells trouble for the battery sector.

That’s because the industry has entered the aftermarket phase —

the era of battery recycling.

The International Energy Agency (IEA) projects that by 2030,

over 1.2 million tons of used EV batteries will be recycled annually.

Even if new car sales stagnate, billions of existing cells on the road

will become valuable raw material assets.

Korean recyclers are taking the lead.

Sungil Hi-Tech, Sebit Chem, and Cosmo AM&T are building recycling plants

in Europe and North America, targeting 95% lithium recovery rates.

This isn’t just an environmental business —

it’s a strategic hedge against lithium price volatility and supply chain shocks.

Governments are also supporting the shift.

Starting in 2030, most major economies will enforce

a minimum 40% battery recycling rate for manufacturers.

That turns recycling into a policy-backed growth sector.

In this new paradigm, recycling isn’t about “being green” —

it’s about economic resilience.

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5️⃣ The Investor’s View — “Don’t Watch Tesla’s Stock. Watch Tesla’s Suppliers.”

Investors often focus on the OEM’s stock performance.

But in the new EV ecosystem, the smarter bet lies behind the scenes —

in the supply chain.

The real beneficiaries of Tesla’s volatility are not carmakers,

but the companies supplying their parts, materials, and data.

Samsung Electronics and SK hynix dominate HBM memory.

LG Energy Solution, Samsung SDI, and SK On anchor the global battery supply.

POSCO Future M and EcoPro lead in cathode materials.

Sungil Hi-Tech turns used cells into reusable resources.

These companies operate on longer time horizons than any automaker’s quarterly cycle.

Car sales rise and fall each quarter,

but the technologies that power those cars define decades of growth.

Hence, in the post-Tesla landscape,

it’s far wiser to track the curve of supply chain innovation

than the fluctuation of Tesla’s share price.

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🔚 Conclusion — “When Tesla Shakes, Korea Stands Taller”

Tesla remains the face of the EV revolution,

but the world is already moving into the stage after Tesla.

The EV industry has evolved into a vast ecosystem —

and at its center stands Korea’s technological infrastructure.

Samsung Electronics and SK hynix supply the brain of the AI-driven car.

LG Energy Solution and Samsung SDI provide its beating heart.

POSCO Future M and EcoPro build the structural bones of the energy supply chain.

And Korea’s recycling firms breathe a second life into every cell.

Tesla’s decline is not a crisis — it’s a sign of industrial transformation.

Power is shifting away from individual brands

toward the nations and corporations that control technology and materials.

And in that transition, Korea is emerging stronger than ever.

> When Tesla pauses, Korea quietly rewires the industry’s heart.

In 2025, the world asks again:

“Who will lead the next era of electric mobility?”

The answer is becoming clearer every day —

It’s Korea.

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⚠️ Notes & References

TrendForce (Aug 2025): HBM Market Bulletin — Analysis of HBM market structure and Korean share.

TrendForce (2025): Global Energy Storage Installations — Data on ESS deployment growth.

SNE Research (2025): Global EV Battery Usage Report (Jan–Aug) — EV battery installation volumes and Korean share.

PV Magazine (2025): Tesla Energy’s Profitability Review.

Benchmark Minerals (2025): Battery Producers’ Margin Comparison.

Reuters (2025): Tesla Signs $4.3B LGES Battery Deal.

Disclaimer:

All figures such as “Tesla’s 17% gross margin” or “China sales down 49%” are based on public data and secondary sources from Q2–Q3 2025.

Some numbers (e.g., market share or installation volume changes) represent aggregated estimates from industry reports.

While every effort has been made to ensure accuracy, minor variations between sources may exist.

This document is for informational and educational purposes only and does not constitute investment advice.

All investment decisions remain the sole responsibility of the investor.