Tesla's Bold Shift: Investing Billions in Autonomous Future

Tesla plans to double capital spending to over $20 billion, shifting focus from traditional EV sales to investments in autonomous vehicles and humanoid robots. CEO Elon Musk announced the end of Model X and S production, reallocating resources to these projects. The move targets AI-driven innovations in transportation.

Tesla is charting a new course in its business strategy by more than doubling its capital expenditure to a record $20 billion this year. However, this investment is largely aimed at unproven sectors like fully autonomous vehicles and humanoid robots, rather than its conventional electric vehicles market.

Dismantling its traditional units, Tesla will cease production of its Model X and Model S to allocate factory space for its ambitious projects. CEO Elon Musk underscores the significance of these investments, stating, "We're making big investments for an epic future." The company aims to enhance its production lines for autonomous vehicles and semi-trucks while investing in Optimus robots and lithium production facilities.

Tesla's shift comes as tech giants such as Meta, Microsoft, and Alphabet also ramp up capital spending to bolster AI capabilities. Financial analysts like Scott Acheychek and Andrew Rocco agree that Tesla's hefty investment is crucial to its transformation focus on autonomous technology, despite its $44 billion reserves.

(With inputs from agencies.)