Tesla doubles spending with $20B AI and robotics push

This article first appeared on GuruFocus.

Tesla (TSLA, Financials) plans to spend over $20 billion this year, more than doubling last year’s investment, as it shifts focus from electric vehicles to artificial intelligence and robotics. CEO Elon Musk said Tesla will end production of the Model S and Model X to make room for humanoid robot manufacturing at its California plant.

The record spending will fund development of the Cybercab, a fully autonomous vehicle, along with the Tesla semi-truck and new battery and lithium facilities. CFO Vaibhav Taneja said most of the funds will support AI-related projects, backed by Tesla’s $44 billion in cash reserves.

Analysts view the investment as essential for Tesla’s evolution. The bigger story is the business model transition now underway, said REX Financial’s Scott Acheychek.

Musk said the expansion reflects necessity rather than ambition, calling the projects investments for an epic future.