Tesla Robotics and AI Investment Drives $20B Autonomous Push

Tesla robotics and AI investment accelerates as the EV giant commits $20B to robotaxis, humanoid robots, and autonomous driving amid slowing car sales

Tesla Inc. is reworking its long-term strategy, unveiling plans to spend $20 billion this year as it pivots away from a car-only identity toward robotics, artificial intelligence, and autonomous driving. The announcement, made during the company’s latest conference call, signals that Tesla robotics and AI investment is now at the core of Elon Musk’s vision for future growth.

Shift From Cars to Autonomous Technology

The massive capital expenditure will be used to scale production, upgrade factories, build AI infrastructure, and expand output of Optimus humanoid robots and fully autonomous Robotaxi vehicles. With global EV demand softening and competition rising, Tesla robotics and AI investment is increasingly positioned as the company’s next major revenue driver.

Tesla executives said the company is prioritizing technologies that blend AI with the physical world, betting that autonomy and robotics will eventually outweigh profits from vehicle sales.

Model S and X Production Comes to an End

As part of the streamlining effort, Tesla is halting production of its Model S and Model X vehicles. The Fremont, California plant that produced the premium models will be repurposed to manufacture Optimus robots.

The luxury Model S and Model X, priced at roughly $95,000 and $100,000, are low-volume offerings compared with Tesla’s mass-market Model 3 and Model Y. Redirecting factory space underscores how central Tesla robotics and AI investment has become to the company’s future plans.

$2 Billion Bet on xAI Strengthens Musk’s AI Ecosystem

Tesla also revealed plans to invest about $2 billion into xAI, Elon Musk’s artificial intelligence startup. The move comes despite a shareholder vote last year that failed to formally approve such an investment.

According to Tesla’s fourth-quarter earnings statement, the company has agreed to acquire preferred shares in xAI’s latest funding round and entered a framework agreement to deepen collaboration. Analysts say the decision further highlights Tesla robotics and AI investment as a strategic priority rather than a side project.

Profit Beat Offers Some Relief

Tesla reported adjusted earnings per share of 50 cents, beating analyst expectations and ending a streak of weaker-than-expected quarters. The stock climbed about 2% in extended trading following the results.

However, broader challenges persist. Tesla’s vehicle deliveries fell 9% in 2025, with a steeper 16% decline in the fourth quarter. Revenue from regulatory credits dropped 22% as U.S. penalties tied to fuel economy standards were rolled back.

Robotaxi Expansion Still Central to Growth

Despite near-term pressures, Tesla is pressing ahead with its autonomous ambitions. The company now has 1.1 million active subscribers to its Full Self Driving software, up nearly 40% year over year, and plans to expand robotaxi operations to several U.S. cities in 2026.

For investors betting on Musk’s vision, Tesla robotics and AI investment remains the key factor that could redefine the automaker’s future beyond electric vehicles.