Tesla Lowers Car Sales Target — Musk Shifts Focus to Robotics and Artificial Intelligence

Tesla's share price fell in premarket trading on Thursday. Against this backdrop, the company lowered its long-term vehicle sales target, while CEO Elon Musk shifted focus to artificial intelligence, robotics, and autonomous driving.

Tesla is now aiming to sell 5 million vehicles by the end of the decade, compared with Musk's original forecast of 20 million vehicles. The shift suggests that other technology directions will play an increasingly important role in the company's future growth strategy alongside EV sales.

Speaking to investors, Musk named humanoid robots, autonomous driving technology, and the Terafab chip manufacturing project as the company's key areas of development.

Commercial potential of Optimus and Robotaxi

Musk urged investors to temper their expectations regarding the capabilities of Tesla's Optimus humanoid robots. According to him, the technology still needs significant improvement before the robots can reliably perform a diverse range of tasks without strictly predefined rules.

The company plans to begin delivering Optimus robots to corporate customers by the end of 2027.

As for Robotaxi — the autonomous taxi service — Musk estimated that the project is unlikely to have a significant impact on the company's financial results in the current quarter. He expects it to become a noticeable source of revenue starting from the second quarter of 2027.

According to UBS analysts, Robotaxi could make a meaningful financial contribution by the end of 2027 or in 2028, though progress on the project could positively affect investor sentiment even before then.

Terafab — a need for more than $100 billion in investment

Another important direction for Tesla is producing its own artificial intelligence chips. To this end, the company is working on the Terafab project together with SpaceX.

According to Musk, the project's long-term cost could exceed $100 billion, underscoring its massive capital requirements. Producing its own chips will help Tesla advance its AI infrastructure, though achieving this goal will require substantial financial resources.

Tesla and SpaceX may merge

Investor attention is also focused on a possible merger between Tesla and SpaceX. According to Musk, both companies have set up special committees to explore a potential deal. He said the merger could offer certain advantages, though a final agreement is not guaranteed.

Meanwhile, Tesla shares are lagging behind the rest of the so-called Magnificent Seven in 2026. Since the start of the year, the stock has fallen 14.1%, while the shares of the other six companies have risen. Over the same period, the S&P 500 index gained more than 13%.

The key challenge for Tesla now will be whether the company can turn its new technology directions into commercially successful products. Investments in robotics and artificial intelligence could open up new growth opportunities, but their financial payoff remains uncertain, while high capital expenditures remain a significant risk for investors.