Well, all the Tesla fans assemble here! No, we are not giving you a major Tesla update, but asking a question- will Tesla still be a car company? You must be wondering why we are asking this question. Well, on a recent earnings call, the Tesla CEO, Elon Musk talked about going ballistic on Artificial Intelligence, as the world is increasingly shaped by AI, Tesla also plans to venture into the world of offering AI-driven services. What’s more? Keep reading the article to decode everything that you need to know about Tesla and AI.
What’s the News?
It all started with an earnings call when Tesla’s CEO Elon Musk shed light on the company’s intense plans of moving towards Artificial Intelligence while shedding much less light on the automotive business. This has intrigued the listeners and the viewers about Tesla’s plan to be an automotive business alone or go beyond that.
Apparently, in the call, there was no core discussion that was done to talk about the automotive part of the business. Majorly in fact, 80% of the company’s revenue is based on automotive, and it was quite a shocker for the audience to find out that in the Q&A session, the Tesla CEO talked about autonomy, AI, and robotics.
Is There A Pattern Here?
Many of the Tesla fans and employees have noticed Musk’s weariness when it comes to spending majorly of his time in the business. Considering the number of side hustles that he does, which includes SpaceX, X, xAI, Boring Company, Neuralink, etc. Additionally, he has become an unofficial member of Trump’s administration, which is also alarming for his desire to focus solely on Tesla. It is noticed that whenever he talks about Tesla, he sheds light on the company’s focus on building humanoid robots and self-driving cars. He truly believes that Tesla will be dominating the world through AI, not battery-powered vehicles
What’s the Underlying Opportunity?
I am pretty sure, that by now, you are curious to know what Tesla will be getting once it starts to venture into AI. Well, as of the current present Tesla does not have any earnings from AI. However, the investors who were caught up in Musk’s fervor asked exactly zero questions related to the company’s stated plans to introduce new, more affordable models this year. The investors were expecting questions on the automobile lines, but instead, there were questions on Tesla’s Optimus robot and when Tesla customers could add their own cars to the company’s robotaxi network.
Why is it So?
Well, the reason why most of Musk’s focus is on building AI-based products might be because of the declining revenues of automobiles. In fact, The company’s sales declined year over year for the first time in over a decade. Vehicle production in 2024 was down 4 percent compared to 2023, and deliveries were down 1 percent. Tesla’s vehicle line up is looking quite not updated as in the last year it made similar updates to two of its models- Model 3 and Model Y, which is its best-selling car. Not just that, the newest model of Tesla, called the Cybertruck, came to a disappointment amidst much hyp,e and that too in less than 12 months
Is it Political or Business Strategy?
While this remains one of the pressing questions considering Musk’s membership in the Trump administration, at this point, it definitely looks like business. Considering the revenue numbers and the stale upgrades, switching to AI-based products will give Tesla a strategic as well as a business advantage to stay ahead of the curve while most of the automobile industry is moving towards AI features in their models. This might be a wake-up call for Tesla as it is becoming a bit more disappointing for customers to ride on their automobile products amidst the stale upgrades. Product innovation is one of the key enablers that will be driving Tesla further in the market. Looks like Musk is already thinking along those lines
Conclusion
While Tesla will be expected to remain an automobile company, its expansion can be seen in the near future. With increased emphasis on humanoids, robots and AI features, the Tesla CEO is looking to stay ahead in the business. That’s all, folks. I hope the article will help you to get all the information you need.
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