Tesla’s automotive engine faces strain as Musk pivots beyond cars

Tesla just posted something it has never posted before: a revenue decline. The company’s 2025 top line fell approximately 3% year-over-year to around $94.83 billion, driven by softening vehicle deliveries. The decline coincides with CEO Elon Musk steering Tesla’s resources, attention, and capital toward everything that isn’t a traditional car. Robotaxis, humanoid robots, an AI startup, and a $25 billion capital expenditure plan for 2026. The pivot in practice On January 28, 2026, Musk announced that Tesla would discontinue production of the Model S and Model X by the end of Q2 2026. Specifically, the Optimus humanoid robot program and robotaxi manufacturing are absorbing the freed capacity. Tesla also invested roughly $2 billion into Musk’s xAI startup. The $25 billion in planned capital expenditure for 2026 is roughly a quarter of Tesla’s entire 2025 revenue, plowed back into AI-driven initiatives. During a July 22, 2026 earnings call, Musk himself described Tesla’s robotaxi ambitions as “ambitious” and emphasized caution around safety and deployment timelines. Mixed signals from Q2 2026 Tesla’s most recent quarterly results showed delivery growth in some markets, but the company ...