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Elon Musk, the CEO of Tesla, has been on a mission for quite some time to rebrand his company as more than just an electric vehicle manufacturer. With the acquisition of Solar City in 2016, Musk aimed to position Tesla as a sustainable energy company. And in recent times, he has been emphasizing Tesla’s potential as an AI and robotics company.
However, despite Musk’s visionary branding efforts, the financial reality of Tesla’s business remains centered around the sales of electric vehicles. In 2025, Tesla generated $94.8 billion in revenue, with the majority ($69.5 billion) coming from EV sales and regulatory credits. The rest of the revenue was split between energy generation/storage and services. The declining EV sales have impacted Tesla’s profitability, with a 46% decrease in profits compared to the previous year.
To counter the sales decline, Tesla is focusing on expanding its non-EV businesses. Musk announced a significant increase in capital expenditure to $20 billion in 2026, pushing the company into negative cash flow territory. Tesla’s decision to discontinue production of the Model S and Model X is part of this strategic shift, with plans to fill the production gap with Optimus humanoid robots and expand its robotaxi operations.
In a move that caught the attention of many, Tesla revealed plans to invest $2 billion in xAI, another Musk-owned company, hinting at a closer alignment between the two entities. Talks of a possible merger involving SpaceX, Tesla, and xAI have also surfaced in various reports.
While Tesla navigates through these strategic shifts, its sales are declining while its energy storage business shows positive growth. The future of Tesla’s business will be shaped by its investments in new technologies and partnerships.
In other news, Waabi secured a significant $750 million in a Series C round, with support from Khosla Ventures and G2 Venture Partners, and an additional $250 million from Uber. The autonomous vehicle startup plans to deploy Waabi Driver-powered robotaxis on its platform. This partnership signifies Waabi’s commitment to scaling its autonomous vehicle technology across different sectors.
Gatik AI, a company specializing in autonomous trucks for the “middle mile,” signed a lucrative deal with a major consumer goods company, expected to generate $600 million in revenue over five years. Luminar’s lidar business was acquired by MicroVision for $33 million, beating out other bidders in an auction.
Redwood Materials secured $425 million in a Series E round, with Google as a new investor, signaling the company’s plans for future growth. Rad Power Bikes, which recently initiated bankruptcy proceedings, reached a deal to sell itself to Life Electric Vehicles Holdings for around $14.9 million.
As the mobility landscape continues to evolve, companies are making strategic moves to stay ahead in the market. Stay tuned for more updates on the latest developments in the world of transportation.
