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Tesla said Wednesday it had agreed to invest about $2 billion in Elon Musk’s artificial intelligence startup xAI, deepening ties between the companies as the automaker pitches itself as an autonomy and robotics-driven company.
Tesla’s shares were up about 2% in extended trading.
Musk has framed AI technology as central to his broader push to develop artificial intelligence that could support the automaker’s self-driving and robotics ambitions.
The Austin, Texas-based company reported revenue of $24.9 billion for the three months ended December 31, down 3% but beating analysts’ average estimate of $24.79 billion, according to data compiled by LSEG. Profit plunged 61% to $840 million.
Wall Street expects the company to deliver 1.77 million units in 2026, representing an 8.2% increase, according to Visible Alpha data.
Tesla’s vehicle business has been under strain as rivals roll out newer models, often at lower prices. A US tax incentive for electric vehicles has also ended, and Musk’s far-right political rhetoric have alienated some customers.
Investors have increasingly focused on Musk’s push into self-driving technology and robotics, with many looking for proof points that the autonomy story is moving from promise to product.
Tesla has leaned on lower-priced “Standard” versions of its best-selling Model 3 and Model Y to attract more price-sensitive buyers, a strategy analysts expect will play a key role in 2026 deliveries growth even if it pressures margins.
Some analysts view it as a deliberate trade-off to expand the vehicle fleet that can later generate higher-margin revenue from software.
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