Tesla plans $20 billion investment to build beyond-EV ambitions like Cybercab, Optimus, more

Building on its already futuristic ambitions in the realm of artificial intelligence (AI) and autonomous vehicles (EVs), Tesla has disclosed plans to more than double its capital spending to a record $20 billion this year, directing a minimal chunk towards its traditional business of selling EVs.

This huge capital spending round from Tesla comes after it lost its global EV sales crown to China's BYD, but now the company is shifting focus to unexplored ventures such as fully autonomous vehicles and humanoid robots.

No more Tesla Model X and Model S

Tesla CEO Elon Musk announced to cease production of the Model X SUV and Model S sedans in the near future, in a bid to reallocate resources in its California factory for humanoid robot production. "This is going to be a very big capex year," he stated, emphasising, "We're making big investments for an epic future."

What Tesla is currently building?

The biggest portion of Tesla's latest investment will be dedicated to production lines for the Cybercab, a fully autonomous vehicle without a steering wheel or pedals, the long-awaited Tesla semi-truck, Optimus robots, and facilities for battery and lithium production, Reuters reported.

Tesla CFO Vaibhav Taneja confirmed that Tesla depends on human-driven EVs for most sales, yet it rivals major tech companies with its massive valuation, thanks to investor confidence in Musk's ambitious promises.

Scott Acheychek, COO of REX Financial, noted: "The bigger story is the business model transition now underway." Andrew Rocco from Zacks Investment Research called the $20 billion spending "necessary," asserting: "If Optimus is going to be a best-selling product, the AI must be trained as well as possible."

This investment far outbids last year's $8.5 billion and the previous record of $11.3 billion in 2024. Taneja revealed that Tesla has over $44 billion in cash and investments, indicating that spending might continue to increase.