"Tesla has been subtly pivoting its strategy for years, but it's now reaching a tipping point. The end of the federal EV tax credit last month and the undeniable rise of Chinese rivals have made selling EVs difficult, to say the least. Sure, Tesla just launched an affordable version of some of its models. But the rollout for those long-awaited cars was somewhat subdued, and reactions were mixed."
"Meanwhile, despite concerns about a bubble, AI valuations show no signs of slowing down. So swapping "EV" for "AI" makes a lot of sense these days. There's just one problem: The EV side of Tesla is the one bringing in the real money. As big and promising as many of Tesla's AI plans are, they're just that ... plans. That puts Musk and Co. in a tricky spot."
"Tesla's AI narrative has been a good pitch so far. After a brutal start to the year, Tesla's stock is up nearly 100% over the past six months. A big part of that run has been recent, with shares rising roughly 34% since September. Although Musk definitely helped things along when he disclosed the almost $1 billion worth of Tesla stock he bought."
Tesla has expanded beyond electric vehicles into AI-driven projects such as robotaxis and humanoid robots. The end of the federal EV tax credit and increased competition from Chinese automakers have made EV sales more challenging. Recent affordable model rollouts produced subdued demand and mixed reactions. AI valuations remain strong, encouraging a narrative shift toward AI opportunities. Despite the strategic pivot, the EV business continues to provide most revenue while many AI initiatives remain developmental plans. Tesla's stock has rebounded significantly this year, aided in part by a sizable insider purchase by Elon Musk, who has been relatively quiet publicly.
Read at Business Insider
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