Tesla said it will invest $2 billion in CEO Elon Musk’s artificial intelligence company xAI and confirmed that production plans for its Cybercab robotaxi remain on track for this year. The announcements highlight Musk’s ongoing push to shift Tesla from primarily an electric vehicle maker to a broader AI and robotics company, a strategy that underpins the company’s $1.5 trillion valuation.
Tesla’s CFO, Vaibhav Taneja, said the company expects capital expenditures to exceed $20 billion in 2026 to support production of humanoid robots, Cybercabs, Semi trucks, and Roadster sports cars. This is more than double the $8.5 billion spent in 2025. Following the disclosure, Tesla shares rose roughly 3.5% in after-hours trading but pared gains to trade up 1.8% after the higher spending figures were released.
Analysts noted that Tesla is now asking investors to value future revenue from self-driving software and robotaxis even as core EV sales face pressure. Thomas Monteiro, senior analyst at Investing.com, said, “That makes rollout metrics—not deliveries—the most important leading indicator from here.” Musk has predicted that fully autonomous vehicles will cover a quarter to half of the U.S. population by year-end, despite missing previous robotaxi rollout targets. Tesla’s limited service in Austin, Texas, fell short of his prior goal to reach half of the U.S. population by the end of 2025.
Tesla’s traditional EV business, which still generates the majority of revenue, has been challenged by competition from newer, often lower-priced models and the end of U.S. tax incentives. Musk also said the company would discontinue production of its Model S sedans and Model X SUVs, repurposing factory space for robotics.
The company reported revenue of $94.83 billion for 2025, down about 3% from the prior year, marking its first annual decline. Vehicle delivery incentives and lower-priced trims helped defend volumes, with Wall Street projecting 1.77 million deliveries in 2026, an 8.2% increase. Adjusted fourth-quarter earnings of 50 cents per share exceeded analyst expectations of 45 cents, while net income fell 61% to $840 million. Tesla’s automotive gross margin excluding regulatory credits rose to 17.9% from 13.6% a year earlier.
Tesla’s energy generation and storage business continues to grow, with fourth-quarter revenue rising 25.5% to a record $3.84 billion, surpassing analyst expectations of $3.46 billion.
Musk warned of potential memory-chip shortages that could constrain Tesla’s expansion, suggesting the company may need to build its own chip facility to secure supply. He also cautioned that production of the Cybercab and Optimus humanoid robot would initially be slow, with significant volumes unlikely until late 2026. The Cybercab, designed without a steering wheel or pedals, faces regulatory hurdles before broader deployment.
Despite the challenges, Tesla’s shares rose about 11% in 2025, reflecting investor confidence in Musk’s long-term vision. His $878 billion pay package, tied to operational and valuation milestones, further reassures shareholders of his commitment to Tesla amid his other ventures and political activity.
