Tesla CEO Elon Musk kicked off the brand new 12 months by springing a number of eye-popping surprises on shareholders, together with a $2 billion Tesla funding in certainly one of his personal corporations (the bogus intelligence agency xAI), and the abrupt elimination of two of the corporate’s automotive fashions, the Mannequin S and the Mannequin X.
The strikes, exceptional even within the context of Musk’s unfettered administration type, underscore the profound transformation underway on the automotive maker because it loses floor within the EV market to Chinese language rivals. Rather than the discontinued automotive fashions, Musk stated that Tesla will use the freed up manufacturing facility house to construct Optimus robots, a nonetheless largely experimental line of humanoid robots that Musk says will finally carry out all the pieces from family chores to surgical procedure.
Tesla executives emphasised that the funding in xAI would construct efficiencies for Tesla, because it wouldn’t need to expend related assets on AI, and Musk stated it might in the end assist Tesla handle the big fleets of autonomous autos and Optimus robots.
“We’re just doing what shareholders asked us to do, pretty much,” Musk stated Wednesday night on the decision, noting that “a lot” of buyers had requested for the funding in xAI.
Shares of Tesla have been up about 1.8% in after-hours buying and selling on Wednesday following the outcomes.
Income was down 3% year-over-year within the fourth quarter, which some analysts have cited because of a slowdown in EV gross sales due to the tip of federal tax credit. Nonetheless, Tesla beat Wall Road targets, posting $24.9 billion in income versus $24.8 billion estimates.
Musk highlighted that Tesla had modified its mission to “build a world of amazing abundance,” from “to accelerate the world’s transition to sustainable energy,” and spoke about how the most probably path of AI was to assist all people receive “universal high income” and higher medical care. The language used on the decision, which included point out of a hypothetical uncommon earth refinery, which “we do desperately need in America” hinted on the time he has spent with President Trump over the past 12 months.
Tesla has been pulling away from its roots as a carmaker lately, in favor of autonomous software program and robotics. “It’s time to basically bring the Model S and X programs to an end with an honorable discharge, because we’re really moving into a future that is based on autonomy,” Musk stated.
Musk stated that Tesla was working 500 robotaxis throughout each Austin and San Francisco, and he stated that it was conducting “randomly selected paid rides” with no security driver in Austin, although it’s unclear right now what number of unsupervised rides have taken place. For the primary time, Tesla shared this quarter what number of of its prospects have been buying its Full Self Driving (FSD) software program. There have been 1.1 million subscriptions in 2025, up from 800,000 in 2024.
Musk has been making guarantees on autonomy for over a decade, although he has been far behind in his timelines and the corporate has but to ship a lot revenue from this line of its enterprise. On Wednesday’s earnings name, CFO Vaibhav Taneja stated of Tesla’s robotaxi fleet that, as a result of Tesla was nonetheless within the “early phase” of its fleet deployment and nonetheless doing a whole lot of validation and testing, the “revenue and cost per mile metrics are not meaningful to discuss at the moment.”
Taneja additionally talked up the funding in xAI, noting that Grok, the chatbot made by xAI, was already in use throughout Tesla’s fleet. “Today, if you look at Tesla vehicles, we are using Grok in there,” he stated.
Throughout his look on the World Financial Discussion board in Davos earlier this month, Musk stated that Tesla deliberate to start promoting Optimus robots by the tip of subsequent 12 months. By repurposing the house in its Fremont manufacturing facility, Tesla stated Wednesday, it is going to be capable of construct 1 million Optimus robots annually.
