Tesla’s EV business stagnates as AI-linked spending surges past $25 billion

Tesla’s core car business has essentially stopped growing. Its AI spending, meanwhile, is accelerating like a Model S Plaid off the line.

The company delivered 1.65 million vehicles in 2025, a 6.7% decline from the prior year. At the same time, Tesla has committed to over $25 billion in capital expenditures for 2026, the bulk of it aimed at artificial intelligence, Full Self-Driving technology, the Optimus humanoid robot, and custom AI chips.

The numbers tell a clear story

Full-year 2025 was rough by almost every financial measure that matters. Net income fell 46% to $3.8 billion. Fourth-quarter profits cratered by 61%. Multiple quarters missed Wall Street delivery expectations, and the annual delivery decline was the first sustained downturn in the company’s history as a mass-market manufacturer.

There was a bright spot in Q2 2026, when deliveries bounced to 480,126 units and beat analyst expectations. But even that beat didn’t exactly spark a celebration. The market reacted negatively, reflecting deeper anxieties about Tesla’s ballooning AI costs eating into near-term margins.

The AI bet gets bigger and bigger

Tesla’s transformation story now centers on three pillars: Full Self-Driving software, the Optimus robot program, and in-house AI compute infrastructure. The company restarted work on Dojo3, its custom AI supercomputer project, in January 2026 after previously suspending the effort. It also committed $2 billion to Elon Musk’s xAI startup that same month, an investment later converted into a stake in SpaceX.

That last detail is worth pausing on. Tesla, a publicly traded automaker, invested $2 billion in a private AI company founded by its own CEO, then saw that position swapped into equity in another private company also run by its CEO.

The planned $25 billion-plus capex for 2026 represents a massive escalation. For context, Tesla’s full-year net income in 2025 was $3.8 billion. The company is spending more than six times its annual profit on future bets.

The Bitcoin wrinkle

Tesla holds 11,509 BTC with a cost basis of approximately $387 million. Under current accounting rules that require marking crypto holdings to market value, this position introduces quarterly volatility that has nothing to do with selling cars or training AI models.

In Q1 2026, Tesla reported an unrealized loss of $222 million on its Bitcoin position.

What this means for investors

Tesla is essentially asking shareholders to fund two companies simultaneously. One is a maturing EV manufacturer facing margin pressure, increasing competition, and flattening demand. The other is a speculative AI and robotics venture that currently generates minimal revenue.

The over $25 billion in planned 2026 capex needs to start showing tangible returns, whether that’s a viable robotaxi service, meaningful FSD licensing revenue, or Optimus units actually doing useful work.

For crypto-focused observers, Tesla’s Bitcoin treasury adds an asymmetric variable. A sustained BTC rally could meaningfully boost Tesla’s balance sheet and offset some automotive margin pressure. A prolonged downturn would do the opposite, amplifying quarterly earnings volatility.

Watch for any acceleration in FSD revenue recognition, updates on Optimus deployment timelines, and whether vehicle margins stabilize or continue sliding.

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