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Tesla CEO Elon Musk spent months – years? – trying to position his company as more than just an electric car maker. When Tesla acquired Solar City in 2016, he (and his comms team) positioned it as a sustainable energy company. Last year, he pushed the idea of Tesla as an AI and robotics company.
Musk’s aspirational branding is at odds with financial reality: A large portion of his revenue comes from selling EVs. Its recent benefits support this.
The company has made a revenue of 94.8 billion by 2025. Of that, $69.5 billion came from selling and leasing EVs and related regulatory credits. The remaining $25 billion is split roughly down the middle between its power generation (solar) and storage business and “services and more,” including revenue from Superchargers, parts sales, and full Self-Driving subscriptions. That dependence on delivery means that as EV sales have declined, so has the rest of Tesla’s balance sheet. Its profits in 2025 were down 46% year-on-year.
Tesla has tried to grow its non-EV businesses to compensate for declining sales, and its Q4 report and full-year earnings (and accompanying call) showed a shift beyond continued AI-robotics talk and into action. Currently, that action involves spending money, not making it. Musk has repeatedly stressed that 2026 will be a big year for CapEx, more than doubling spending to $20 billion, which will put them in a breakeven position.
For example, Musk has announced that Tesla will stop production of the Model S and Model X, which is more symbolic than physical. Those two models represent about 2% of Tesla’s sales volume, a point Barclays analyst Dan Levy also made in his latest note. Still, it’s a notable end to an era for Tesla and the wider auto industry, which was forever changed when the Model S went on sale in 2012.
A more visible movement is what Tesla plans to do now.
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Tesla plans to fill the manufacturing void left by the Model S and X with its Optimus humanoid robots, which will be manufactured at its Fremont, California factory. Musk also aims to ramp up Tesla’s robotics operations in more cities by 2026 and even floated the need for Tesla to build a TerraFab factory to boost chip supply.
But what really stood out to me – and the real circular economy deal for Elon Inc – was Tesla’s plan to invest $2 billion in Musk’s other company, xAI, and signed plans to closely integrate the two companies. Meanwhile, other outlets are reporting ongoing talks to merge (in some form of merger) Musk’s three companies: SpaceX, Tesla, and xAI.
But let’s go back to earth for a moment and review Tesla’s current business. Its sales are down year-on-year, while its small energy storage business has made good profits.
A small bird
We’re not quite ready to share the full details yet, but we’ve heard from one birdie that there’s some work to be done on Waymo’s fundraising. You probably saw it reported last month about Waymo raising $15 billion in funding led by its parent company Alphabet. Based on my conversations, it is still “in the area” of 15 billion dollars and most of it comes from Alphabet, and there is a lot of interest from foreign investors to join. One little bird told me that one of the investors might be an OEM (original equipment manufacturer.
Stay tuned for more on this.
Got a tip? Email Kirsten Korosec at kirsten.korosec@techcrunch.com or my Signal at kkorosec.07, or email Sean O’Kane at sean.okane@techcrunch.com.
Deals!
They were bad it gets my “deal of the week” badge – and not just because of the dollar figures attached. Autonomous car startup raises $750 million in co-led Series C round Khosla Ventures again G2 Venture Partnersand another $250 million in historic capital from Uber supporting the deployment of more than 25,000 Waabi Driver-powered robots exclusively in its area.
Uber is already a sponsor of Waabi, participating in one of its early promotions in 2021. But this is more than money. When Waabi first launched, it focused on applying its autonomous vehicle technology to self-driving trucks. The deal with Uber is an announcement that it intends to scale its technology to multiple self-driving locations with a single technology stack.
Can Waabi do it? Others have tried and backed down. Waymo shut down its self-driving truck program to focus on robotaxis; Aurorawho is also an investor in Waabi, worked on both trucks and robots, too, before deciding to focus on big rigs.
Some deals caught my attention…
Gatik AIa startup developing autonomous trucks focused on the “middle mile,” has signed a deal with a major (unnamed) consumer goods company. Here’s why it matters: The contract will bring in $600 million in revenue over five years. And this is driverless transportation, which means there is no safety driver behind the wheel. These Gatik trucks, which operate 24 hours a day transporting packaged, frozen, and frozen goods between distribution centers and stores, have been operating without driving since mid-2025. According to the company, it has completed 60,000 orders without incident.
Luminar’s The lidar business has been sold for $33 million to Redmond, based in Washington MicroVision. The company, which makes its own sensors, beat Quantum Computing in the auction for these goods. TC’s Sean O’Kane interviewed MicroVision CEO Glen DeVos about his plans for Luminar. The sales process had a last-minute twist when a mystery manufacturer, with a huge offer, made a play for Luminar’s business.
Rad Power Bikeswhich started bankruptcy proceedings about a month ago, reached an agreement to sell itself to Life Electric Vehicles Holdings (or Life EV) for approximately $13.2 million. Including Rad Power’s debts, the total bid amount is $14.9 million. History lesson: Rad Power has raised $329.2 million since inception and was once valued at $1.65 billion.
Redwood Materials raised $425 million in a Series E round that included Google as a new investor. The round was led by venture capital firm Eclipse and includes strategic investment from Nvidia’s venture capital arm NVentures, along with existing investors Capricorn and Goldman Sachs. Read the full story to learn what Redwood plans to do with the capital.
Notable readings and other stories
Obia company that aggregates real-time prices and pickup times for all ride-hailing services, has shared new data about ride-hailing and robotics in the San Francisco Bay Area. There are a few takeaways – so please go read the full story – including that the price gap between Waymo and rides offered by Uber and Lyft is narrowing.
Uber launched a new division called Uber AV Labs, ie not – as senior journalist Sean O’Kane points out – the first trick is to reinvent its robotaxis. This is a data sharing game; Uber cars with sensors will collect and share data with partners like Lucid, Waymo, and Waabi. Important note: No contracts have been signed yet.
Waymo is now permitted to use shuttle service to and from San Francisco International Airport (SFO). The company will first offer access to SFO to a select number of passengers before offering it to all customers in the coming months. That win comes with a little contamination, however. Waymo is being investigated by National Highway Traffic Safety Administration again National Transportation Safety Board after the company reported that one of its robots hit a child near an elementary school in Santa Monica on January 23.
I San Francisco Police Departmentinvestigates an incident involving a Zoox a private car that hit the driver’s side door of a parked car.
One thing…
It’s been a few weeks since we had a poll and here’s a fun one: What will be the name or logo of Musk’s big combined company?
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