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Tesla Profits Plummet Amid AI Investment Frenzy
29 Jan
Summary
- Fourth-quarter profits fell 61 percent due to lower sales and higher expenses.
- Elon Musk's self-driving claims face skepticism despite a $2 billion xAI investment.
- Tesla anticipates a 'return to growth' despite a nine percent sales decline in 2025.
Tesla's fourth-quarter profits saw a sharp 61 percent decline, reaching $840 million compared to $2.1 billion a year prior. This downturn is linked to lower auto sales and increased research and development costs, particularly for artificial intelligence pursuits.
CEO Elon Musk's claims of self-driving cars being 'essentially a solved problem' face skepticism from analysts, despite Tesla's significant $2 billion investment in Musk's xAI artificial intelligence venture, announced on January 16. This investment aims to foster potential AI collaborations.
Tesla's financial results reflect a turbulent year, including a nine percent decrease in auto sales in 2025 amid rising competition. The company, however, projects a 'return to growth' in vehicle sales, focusing on maximizing factory capacity utilization.
