How Musk Is Staking Tesla’s Future on AI, Robotaxis and Robots

Tesla Inc. is among the most expensive stocks in the S&P 500. That might seem odd in the wake of one of its worst quarters for electric vehicle sales in years. But it’s not EVs that are keeping the shares trading at more than 180 times expected earnings. Instead, investors are betting on what Chief Executive Officer Elon Musk sees as the company’s true calling: self-driving cars and humanoid robots, powered by artificial intelligence.

Tesla has described itself as transitioning “from a hardware-centric business to a physical AI company.” It plans to triple its spending to more than $25 billion this year to help accelerate that transformation. Tesla is also investing in a giant chipmaking factory, known as Terafab, to power its AI ambitions. This will be a joint venture with Musk’s rocket builder SpaceX, highlighting how the different segments of his business empire are becoming increasingly intertwined.