NEW YORK, Jan 29, 2026, 11:39 ET — During the regular session
Tesla shares dropped roughly 2.2% to $421.80 in late-morning trading Thursday, as investors weighed the company’s fresh moves into self-driving tech, robotics, and increased spending. The stock kicked off the day at $438, fluctuating between $414.97 and $445.09.
This shift is significant as Tesla urges investors to focus beyond immediate car sales and back a fresh narrative: software, robotaxis, and humanoid robots. That storyline has helped maintain a valuation well above legacy automakers, despite the growing competition in the EV space.
The direction hasn’t shifted in the last 24 hours — but the scale of investment has. Capital expenditures, which cover spending on factories and equipment, have become a key focus. Alongside that, the pace at which Tesla can move from prototypes to market-ready products is under close scrutiny.
Late Wednesday, Tesla posted Q4 revenue of $24.9 billion, down 3% year-over-year. Net income attributable to common shareholders dropped to $840 million. The company finished 2025 holding $44.1 billion in cash, cash equivalents, and investments. Energy generation and storage revenue climbed to $3.84 billion for the quarter. Tesla also announced on Jan. 16 it agreed to invest about $2 billion in Elon Musk’s xAI, with the deal expected to close in Q1 2026. Its guidance confirmed Cybercab, Tesla Semi, and Megapack 3 are still on track for volume production in 2026. (SEC)
During its earnings call, Tesla announced plans to more than double its capital spending to over $20 billion this year. Most of that will fund production lines for the Cybercab, Optimus robots, the long-awaited Semi, and battery and lithium output. CFO Vaibhav Taneja said Tesla could cover these investments with cash reserves and “through more debt or other means.” Meanwhile, Elon Musk confirmed Tesla will halt Model S and Model X production, repurposing that factory space for robot manufacturing. Reuters reported Tesla also lost its global EV sales lead last year to China’s BYD. “The bigger story,” said Scott Acheychek, COO of REX Financial, “is the business model transition now underway.” (Reuters)
Tesla announced a $2 billion investment in xAI and confirmed that Cybercab production remains on schedule, which initially pushed shares higher in after-hours trading before the capital expenditure details tempered the rally, Reuters reported. Thomas Monteiro, a senior analyst at Investing.com, described Tesla as “entering a transition phase,” emphasizing that “rollout metrics — not deliveries —” will be the key focus going forward. (Reuters)
Still, the bet on autonomy and robotics comes with plenty of risks. Heavy spending could pinch free cash flow if car demand lingers weak. And delays are a real threat once new hardware runs into regulators, suppliers, and real-world edge cases.
Traders will zero in on concrete figures from Tesla about robotaxi growth, software adoption rates, and factory expansions instead of more broad promises. Keep an eye out for updates on how Tesla intends to finance the upcoming capex jump — plus whether the xAI deal finalizes in the first quarter, as anticipated.
