Robotics drive Tesla to axe EV models
Tesla is set to discontinue two of its electric vehicle (EV) models in a shift towards robotics. The news comes after the EV maker reports its first ever decline in annual revenue. Company boss Elon Musk told analysts during a conference call that its older Model S and Model X will be axed, with factory space converted for its Optimus robots.
Investment would be over double this year to $20 billion (£14.5 billion), of which, $2 billion (£1.45 billion) would be for Musk’s artificial intelligence division, xAI. The goal is to follow through on promises made by Musk relating to the company’s move towards autonomous cars and robotics.
Musk aims to manufacture the Cybercab, robotaxi, which have been delayed due to regulatory difficulties and a lack of capacity. A shortage of memory chips as a result of a wider move towards AI around the world has held up production before it ramps up later this year, he warned.
As the traditional EV space become more crowded, especially with the rise of Chinese firms such as BYD, Tesla will look elsewhere for revenue. The American company saw revenue and profits fall in 2025, following a backlash against Musk for his part in the Trump administration, as well as an end to EV incentives by the president. The sales it made came as a result of sharp discount.
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