Since shifting its focus to AI and Robots, Tesla, the US-based EV-manufacturing giant, has seen a drop in its annual revenue. The company reported a 3% decline in its revenue in 2025, while the overall profits fell by 61% during the last three months. Tesla has plans to stop the production of its Model S and Model X vehicles and start manufacturing humanoid robots called Optimus. Apart from this, Musk’s involvement in politics and the resultant controversies have also shifted users from his business venture, Tesla.
In January this year, China’s BYD had overtaken Tesla in global sales, a testament to Tesla’s dwindling acceptance among buyers.
Tesla’s Investment in xAI
Tesla recently announced a significant $2 billion investment in xAI, Elon Musk’s AI company. Tesla agreed on January 16, 2026, to acquire Series E Preferred Stock in xAI as part of its recent financing round, valued at around $20 billion. The deal, made on market terms that match those of other investors, is pending regulatory approval.
The investment is likely to enhance Tesla’s development of physical-world AI applications such as Optimus robots and Full Self-Driving software. xAI’s Grok model is already integrated into Tesla vehicles, aiding fleet management and autonomy. This aligns with Tesla’s master plan of transitioning from sustainable energy to AI abundance.
Tesla’s Plans for Optimus Robot Production
Tesla plans to rapidly scale Optimus humanoid robot production, starting with internal factory deployment and eventually aiming for high-volume output. Elon Musk has outlined ambitious targets tied to Tesla’s AI strategy.
Tesla began installing first-generation production lines in 2025, with several thousand units planned that year. The company aims for a tenfold increase in production, targeting 50,000–100,000 by 2026. A production-intent Optimus V3 prototype is set for Q1 2026, potentially enabling mass production ramps.
Tesla aims for 1 million units annually via vertically integrated lines, with self-replication concepts for even larger scales, like 10 million per year. This supports Tesla’s shift to AI abundance. However, analysts are sceptical about the company achieving the goals within the given timeline.
Tesla’s Plans for the Production of Robotaxis
Tesla plans to start Cybercab robotaxi production in 2026, with initial low-volume output ramping up over time. Elon Musk has confirmed testing of the production system, targeting a real ramp in April ahead of broader deployment.
Production of the Cybercab, a two-seater without a steering wheel or pedals, is set to begin in Q2 2026 using Tesla’s unboxed manufacturing process for faster cycle times under 10 seconds per unit initially. Musk describes early rates as “agonizingly slow” due to new parts and processes, but expects an S-curve acceleration.
Cybercabs will join Tesla’s robotaxi service, currently using Model Y with Full Self-Driving, expanding to consumer sales and fleets in multiple U.S. cities by the end of 2026, pending regulatory approvals. Long-term targets include 2 million units annually, supporting autonomous ride-hailing.
