How Tesla Is Betting on Robotaxis and Robots as EV Sales Slump

Tesla Inc. is facing a difficult road ahead after deliveries of its fully electric vehicles declined for a second year in a row and were overtaken by Chinese rival BYD Co. on an annual basis for the first time. The slump reflects heightened competition, the end of US tax credits for EV purchases and backlash against the polarizing politics of Chief Executive Officer Elon Musk.

Despite those headwinds, investors remain buoyant, keeping Tesla’s market capitalization hovering around $1.5 trillion. They’re increasingly looking beyond human-driven EVs in the here and now, instead betting on what Musk sees as the firm’s true-calling: self-driving cars and humanoid robots, powered by artificial intelligence.