Why is Tesla investing $20 billion in AI and robots?

Tesla is investing $20 billion in artificial intelligence and robotics to secure an "epic future," pivoting from traditional car manufacturing towards autonomous vehicles and humanoid robot production.

What will happen to the factory that built Tesla's Model S and X?

The California factory that previously produced the Model S and X will now be used to manufacture Optimus humanoid robots, with a goal of producing one million per year.

How significant was Tesla's financial performance in 2025?

In 2025, Tesla experienced its first-ever annual revenue fall, with a 3% decrease, and its profits tumbled by 61%.

Home / Business and Economy / Tesla Pivots: Billions for AI & Robots, S/X Cars Axed

Tesla Pivots: Billions for AI & Robots, S/X Cars Axed

29 Jan

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Summary

Tesla's revenue dropped 3% in 2025, with profits down 61%.
The company will invest $20 billion in AI, robots, and autonomous vehicles.
The factory for Model S/X will now produce one million Optimus robots annually.

Tesla Pivots: Billions for AI & Robots, S/X Cars Axed

For the first time in its history, Tesla recorded a decline in annual revenue in 2025, with a 3% decrease, and a staggering 61% drop in profits. Elon Musk revealed the company's strategic pivot, announcing a massive $20 billion investment planned for the upcoming year, primarily focused on artificial intelligence and robotics.

As part of this shift, Tesla will discontinue production of its S and X models. The California factory previously responsible for these vehicles will be retooled to manufacture Optimus humanoid robots, with an ambitious target of one million units produced annually.

Further investments will be directed towards Musk's xAI venture ($2 billion), the development of the Cybercab (a fully autonomous vehicle), the Tesla semi-truck, and expanded battery and lithium production facilities. Musk characterized these substantial capital expenditures as crucial for securing an "epic future."