SAN FRANCISCO, January 29, 2026, 09:11 (PST)
- Tesla is set to put $2 billion into Elon Musk’s AI startup xAI and confirmed that production of the Cybercab robotaxi remains on schedule for 2026
- CFO reveals Tesla’s capital spending for 2026 will top $20 billion to support its robotaxi and robotics expansion
- Tesla’s revenue for 2025 dropped roughly 3%, even as its energy storage segment hit a record quarterly revenue
Tesla announced a $2 billion investment in Elon Musk’s AI startup xAI and confirmed that production of its Cybercab robotaxi is still set to begin this year. The stock climbed in after-hours trading but pulled back somewhat as investors weighed the surge in spending.
This move strengthens the connection between Tesla and Musk’s broader AI ambitions just as investors are increasingly pricing Tesla less as a traditional automaker and more as a play on autonomy and robotics. That transition now dominates the conversation around the company’s roughly $1.5 trillion market value.
Tesla’s main electric-vehicle segment is feeling the pinch from fresh, often more affordable competitors. To keep sales steady, the company has relied heavily on discounts and incentives, all while a U.S. electric vehicle tax credit has expired.
Tesla’s shift to AI won’t come cheap. CFO Vaibhav Taneja revealed that capex will top $20 billion in 2026—more than double the $8.5 billion spent in 2025. The surge covers investments in Cybercabs, humanoid robots, Semi trucks, and the Roadster sports car.
Tesla’s latest numbers explain why investors are still hunting for a breakthrough. The company reported 2025 revenue down around 3%, landing near $94.83 billion. Net income plunged 61% to $840 million for the quarter, though adjusted earnings per share came in at 50 cents, beating Wall Street’s 45-cent estimate.
Margins ticked up. Tesla’s automotive gross margin, excluding regulatory credits from selling emissions allowances to other automakers, climbed to 17.9%. Meanwhile, the energy generation and storage division hit a record quarterly revenue of $3.84 billion, driven by strong demand for grid-scale batteries. Thomas Monteiro, senior analyst at Investing.com, called Tesla “entering a transition phase,” and Zacks Investment Research strategist Andrew Rocco pointed out the shift allows investors to get in on the “scorching hot AI boom.” Reuters
Musk once more highlighted the rollout timeline. He told analysts he expects fully autonomous vehicles to cover a quarter to half of the U.S. by the end of 2026, despite earlier robotaxi goals being pushed back and Tesla launching only a limited service in Austin, Texas.
He also announced Tesla will halt sales of its Model S sedans and Model X SUVs—once the backbone of the brand—and repurpose that factory space for robotics. Tesla plans to introduce Cybercabs into its robotaxi fleet and offer them to customers. However, these vehicles lack steering wheels and pedals, which clearly complicates regulatory approval.
Lots can still go sideways. Musk cautioned that an upcoming memory chip shortage might leave Tesla “fundamentally limited by supply chain,” while the company’s ambitions hinge on big spending, regulatory approvals, and software development moving faster than it has in the past.
The xAI investment is also being scrutinized through the lens of Musk’s compensation. Reuters reported an $878 billion pay package tied to hitting valuation and operational targets. Livemint, referencing other sources, estimates the potential value could near $1 trillion. They note the stock grant is divided into 12 tranches, starting when Tesla hits a $2 trillion market cap and stretching up to $8.5 trillion.
Livemint reported other key milestones like hitting 20 million vehicles delivered, surpassing 10 million active Full Self-Driving (FSD) subscriptions—Tesla’s signature driver-assistance software—rolling out one million Optimus humanoid robots, and launching one million robotaxis commercially. The outlet noted the xAI partnership might cut down Tesla’s reliance on expensive in-house AI infrastructure as it pushes to expand these initiatives.
The Financial Times revealed Tesla is dropping some models as it shifts deeper into AI and robotics following its first-ever annual revenue drop.
