It sounds like a fever dream or a headline designed for clicks. Tesla, the company that basically dragged the entire automotive world into the electric age, wants out of the car business? Honestly, if you look at the 2025 delivery numbers, you might start to believe it. For the second year in a row, vehicle deliveries have actually slumped. We’re looking at about 1.64 million units for the full year of 2025, a nearly 9% drop from the year before.
But it’s not just about the numbers. It’s about the vibe shift.
Elon Musk has been signaling this for a while, but 2026 is the year where the "car company" label feels like a jacket that’s gotten way too tight for Tesla to wear comfortably. The focus has shifted so hard toward artificial intelligence and robotics that the cars are starting to feel like the side hustle.
Tesla Wants Out of the Car Business—Sorta
To be clear, Tesla isn't going to stop stamping out Model Ys tomorrow. They have massive gigafactories in Shanghai, Berlin, Texas, and Fremont that need to stay busy. However, the internal priority has fundamentally changed. During the 2025 shareholder events, the roadmap became crystal clear: Tesla is now an AI and robotics powerhouse that happens to fund its R&D by selling electric sedans.
Think about the "Model 2"—that $25,000 EV everyone was waiting for to finally make electric cars affordable for the masses. In early 2024, reports surfaced that the project was effectively killed or at least "pivoted" into the ground. Why? Because Musk wanted to go all-in on the Cybercab.
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The Cybercab is the physical manifestation of Tesla wanting out of the traditional car business. It doesn't have a steering wheel. It doesn't have pedals. It’s not a product you buy to drive; it’s a node in a massive autonomous network. Production is slated for April 2026 at Giga Texas, using a weirdly named "Unboxed" manufacturing process. This isn't just a new car; it’s an attempt to delete the concept of car ownership entirely.
The Numbers Tell a Story
- Sales Slump: 1.64 million deliveries in 2025 (down from previous peaks).
- The Rivalry: BYD actually overtook Tesla in global EV deliveries last year.
- Profit Margins: Net income has shrunk significantly—down nearly 60% year-over-year as they slash prices to keep the "legacy" car business afloat.
Why the Pivot is Happening Now
You've probably noticed that the EV market is getting crowded. It's not 2018 anymore. Every major manufacturer from Hyundai to Ford has a decent electric offering, and the Chinese brands are absolutely relentless on pricing. Tesla’s margins, which used to be the envy of the industry, have taken a beating.
Basically, being "just" a car company is a brutal, low-margin slog. Musk knows this.
He’s betting everything on Optimus and Full Self-Driving (FSD). He recently claimed that humanoid robots could eventually account for 80% of Tesla’s total value. That is a staggering statement. We are talking about a future where the Fremont plant—the place that birthed the Model S—is being reconfigured to pump out a million Optimus units a year.
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The goal for 2026 is to produce between 50,000 and 100,000 of these robots. If they can actually pull that off, the revenue from robotics could start to eclipse the growth they're seeing in the maturing EV market.
The Identity Crisis of 2026
There’s a massive tension right now between what Tesla is and what it wants to be. If you're an investor, you're looking at a stock that trades at over 300x earnings. That is not a car company valuation. That’s a "we’re going to solve general AI and replace human labor" valuation.
But if you’re a guy just trying to get a reliable commuter car, you might feel a bit abandoned. The Cybertruck has been, let’s be real, a bit of a polarizing mess in terms of production scale. Updates to the Model 3 and Model Y have been subtle—some call them "yawn-inducing"—while the competition is rolling out fresh designs every six months.
The Real Risks
- Regulatory Walls: The Cybercab is cool, but Tesla still hasn't secured federal approval for a truly driverless configuration without a steering wheel.
- The "Long Tail": FSD v14 is impressive, but "unsupervised" driving is still struggling with those weird, 1-in-a-million edge cases that humans handle instinctively.
- The Competition: While Tesla focuses on robots, companies like Waymo are already operating driverless taxis in multiple cities. Tesla is playing catch-up in a race they claim to be leading.
What This Means for You
If you’re looking to buy a Tesla, expect them to feel more like "software on wheels" than ever before. The hardware is becoming standardized and, dare I say, a bit repetitive. The real "product" they are selling is the FSD subscription and the ecosystem.
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For the rest of the world, Tesla's pivot is a signal that the first phase of the EV revolution is over. The "cool factor" of just having a battery instead of an engine has worn off. Now, the battle is about who owns the brains of the vehicle.
Actionable Insights for the Future
- Watch the April 2026 Deadline: If Cybercab production actually starts in Texas without a hitch, the "Tesla is an AI company" argument wins. If it's delayed (again), expect the stock to get punished.
- The Energy Factor: Don't ignore the Megapack business. Tesla’s energy division grew 44% last year while car sales only grew 6%. This is the quiet engine funding the robot dreams.
- Resale Value: As Tesla moves toward a "robotaxi" model, older models without the latest AI4 or AI5 hardware might see their resale value drop faster than expected.
Tesla isn't closing its car factories, but the heart of the company has moved on. They aren't trying to be the next Toyota anymore; they’re trying to be the next NVIDIA and Boston Dynamics rolled into one. Whether they can actually build 100,000 robots that don't fall over is the multi-trillion-dollar question of 2026.
To keep a pulse on this transition, monitor Tesla’s quarterly "Services and Other" revenue category. When that number starts to outpace automotive growth consistently, you’ll know the car business has officially become the secondary interest.