Multi-billionaire Elon Musk also announced plans to end production of its Model S and Model X vehicles.

Tesla just wrapped up its earnings call for the 2025 fiscal year, in which it recorded that its year-on-year profits dropped by nearly half. Its GAAP net income came to US$3.8 billion, down from $7.1 billion in 2024,

Tesla CEO Elon Musk announced a $2B investment into xAI and the discontinuation of Model S and Model X in order to support Optimus robot production.

Tesla has reported its first annual revenue decline as it cuts the Model S and Model X, pivots manufacturing to humanoid robots and deepens investment in AI.

Elon Musk says Tesla will stop making its Model S and X vehicles and convert its California factory to produce Optimus humanoid robots.

Speaking at the World Economic Forum in Davos, Switzerland last week, Musk said that Tesla is “planning to make its Optimus robots available for sale to the public by the end of 2027.” That is when Tesla will be confident that the robots will be highly reliable, safe and functional. The robots will be able to perform any task, he said.

CEO Elon Musk says physical AI could make Tesla a $25 trillion company in the future, a forecast that implies 1,560% upside from its current market value. Nvidia and Tesla could deliver monster returns for shareholders as the AI revolution continues.

Musk highlighted Tesla’s shift towards AI and robotics, as the company’s electric vehicles continue to see a decline in sales.