Is Tesla About EVs or Artificial Intelligence? Musk’s Vision Explained
For years, Tesla was the face of the electric vehicle revolution. Sleek Model S sedans and Model Y crossovers became symbols of a greener future, and investors piled in, thinking they were betting on the next big car company. By mid-2025, that story has become less straightforward. Tesla’s car deliveries dropped to 384,112 in the second quarter, marking one of its steepest delivery declines, yet the stock climbed anyway. The market’s reaction made the message clear: investors are now betting on Tesla’s future in artificial intelligence, not just its cars.
A Car Company That Wants to Be an AI Giant
Image via Wikimedia Commons/Maurizio Pesce
Elon Musk has increasingly emphasized Tesla’s focus on robotaxis, humanoid robots, and AI-powered factories in recent years. Beyond cars, Tesla positions itself as a technology company building an AI-driven ecosystem that connects mobility, robotics, and energy. The company’s advantage lies in the data collected from its millions of vehicles on the road, which continuously feed information to train its Full Self-Driving (FSD) system.
Unlike competitors such as Waymo and Zoox, Tesla relies primarily on cameras and software rather than radar or LiDAR sensors. This approach lowers costs and makes scaling easier, but it has also drawn criticism from regulators investigating safety issues, including reports of sudden braking.
Robotaxis, Robots, And Beyond
Image via Wikimedia Commons/Tesla
Robotaxis play a central role in Tesla’s push for autonomy. In June 2025, Tesla launched a limited pilot fleet of robotaxis in Austin. Shortly after, footage of traffic violations from the fleet circulated, which prompted the National Highway Traffic Safety Administration to review safety concerns. The rollout shows progress but underscores the significant work required before such a network can expand nationwide.
Tesla is also advancing its Optimus humanoid robot project, which was first announced in 2021. It’s powered by the same AI system used in its vehicles. Optimus is designed for tasks that are unsafe or repetitive in nature. The robots have already been tested in Tesla’s factories to assist manufacturing processes. Musk has suggested that Optimus could eventually become an essential part of Tesla’s business, though timelines for large-scale production remain ambitious.
Energy Is Part Of The AI Story Too
Tesla’s AI ambitions extend into renewable energy. The company acquired SolarCity in 2016 for $2.6 billion and laid the groundwork for solar panel products and large-scale energy storage. In 2024, Tesla signed a 15.3 gigawatt-hour (GWh) storage contract with Intersect Power, expanding grid resilience projects that use Tesla’s vertically integrated hardware and software.
The Road Ahead
Tesla faces substantial challenges as competition intensifies. Its U.S. EV market share has declined, dropping into the upper 30% range by 2025, compared to a stronger dominance in earlier years. General Motors, on the other hand, has expanded its EV lineup under Cadillac, Chevrolet, GMC Hummer, and Buick.
Globally, BYD, a Chinese multinational company based in Shenzhen, outpaced Tesla in 2024, with a 22.2% market share compared to Tesla’s 10.3%. Meanwhile, companies such as Wuling, BMW, and Li Auto are also gaining ground. Regulatory scrutiny continues, with U.S. agencies closely monitoring Tesla’s FSD safety performance and autonomous vehicle trials. Still, Tesla’s AI-driven ambitions remain a central point of investor interest.