Tesla Commits $2 Billion to Musk's xAI, Cybercab Production
.jpg)
Tesla announced that it will allocate $2 billion towards CEO Elon Musk’s AI venture, xAI, and confirmed that the development of its Cybercab robotaxi is proceeding as planned for this year.
The announcement is anticipated to support Musk's plan to pivot Tesla from an electric vehicle maker to an AI company. This could be key to the company's roughly $1.5 trillion valuation, while reassurance of production plans is critical for investor confidence as Tesla has repeatedly fallen short of promises made by Musk.
But Musk's plan to build Cybercabs, as well as, humanoid robots, along with Semi trucks and Roadster sports cars, may lead to a series of factory investments that will take capital expenditures above $20 billion this year, Chief Financial Officer Vaibhav Taneja denotes.
Tesla is believed to be "entering a transition phase" where it may require investors to underwrite potential revenue from self-driving software in its cars and robotaxi business before auto sales recover, says Thomas Monteiro, senior analyst, Investing.com.
"(That) makes rollout metrics - not deliveries - the most important leading indicator from here," Monteiro says.
Musk, who has made a number of inaccurate forecasts about robotaxi rollout, says he expected to have fully autonomous vehicles in a quarter to half of the US by the end of this year.
He had said robotaxis would reach half of the US population by the end of 2025 - before later narrowing that goal to deployment in the top eight to 10 metropolitan areas. The company has since missed those targets with a limited robotaxi service in Austin, Texas.
Also Read: Hyundai Motor Shares Hit Record High amid Nvidia Partnership Speculati
Tesla's core EV business, which still accounts for most of the company's current revenue, has been under strain as rivals roll out newer models, often at lower prices. A US tax incentive for electric vehicles has also ended, and Musk's far-right political rhetoric has alienated some customers.
Also Read: Maruti Suzuki Clears Land Buy for 35,000-Crore Gujarat Plant
Furthermore, Musk told analysts on a conference call that Tesla would stop selling its Model S sedans and Model X SUVs - flagship vehicles that once established the company as a leader in the EV market but have since dwindled to account for a small fraction of revenue. The factory space will be used to build robots.
Also Read: Soumith Chintala Named CTO of Thinking Machines Lab
Tesla's revenue fell about three percent to roughly $94.83 billion in 2025, marking the company’s first annual decline in revenue.