Key Points
- Massive AI Investment: Tesla plans to reinvest approximately ¥57.4 billion RMB ($8 billion USD) in capital expenditures for the current fiscal year, primarily focused on AI initiatives like internal hardware, vehicle sensors, and the Dojo Supercomputer.
- AI Infrastructure: Tesla’s Cortex computing center has over 50,000 GPUs and is nearing 100,000, being one of the world’s top five supercomputing centers. The Dojo 2 supercomputer is expected to be 10 times more powerful.
- Financial Concerns: Despite AI investments, Tesla’s capital expenditure forecasts have been repeatedly lowered, with concerns from Wall Street, including Wells Fargo (富国银行), which issued a “Sell” rating and warned of a potential negative free cash flow for the first time since 2018.
- Q1 Performance Decline: Tesla’s Q1 2025 financial report showed significant decreases, including a 9% drop in total revenue and a 71% decrease in net profit attributable to shareholders year-over-year.
- Robotaxi Pivot: Tesla is making a strategic pivot to Robotaxi, with trial operations beginning in Austin, Texas. Analysts like Pacific Securities (太平洋证券) and CITIC Securities (中信证券) view this as a significant step towards commercialization, aiming to improve vehicle utilization and reduce costs.
Tesla’s latest AI investment strategy is a massive, multi-billion-dollar bet on the future, but it comes at a time when the company’s core business is flashing some serious warning signs.
On June 21, Tesla (Tèsīlā 特斯拉) officially announced its plan to reinvest approximately ¥57.4 billion RMB ($8 billion USD) in capital expenditures for the current fiscal year.
This is just the latest move in a much larger spending spree.
Since the beginning of this year, the company has already poured around ¥315.9 billion RMB ($44 billion USD) into capital expenditures.
And last year alone, that number hit ¥71.8 billion RMB ($10 billion USD).
So, where is all this cash going? One place: Artificial Intelligence.
Tesla’s $8 Billion AI Bet: Doubling Down on the Future
Artificial intelligence is the cornerstone of Tesla’s future, and they’re putting their money where their mouth is.
In March 2025, CEO Elon Musk (Mǎsīkè 马斯克) revealed that Tesla’s 2024 AI investment was a staggering ¥72.5 billion RMB ($10 billion USD).
Here’s a quick breakdown of where that investment is focused:
- Internal Hardware: Nearly half the investment goes into Tesla’s own tech, including its self-developed AI inference computers.
- Vehicle Sensors: Upgrading and developing the sensor suites across its entire fleet.
- Dojo Supercomputer: The powerhouse behind its autonomous driving ambitions.
All Tesla models currently rolling off the line are equipped with the AI 4 in-car computing platform.
But the roadmap doesn’t stop there. Get ready for AI 5, AI 6, and AI 7 in the coming years.
To power all this, Tesla is building some serious computational muscle.
The company’s Cortex computing center, used for training its intelligent driving systems, already boasts over 50,000 GPUs and is rapidly approaching the 100,000 mark.
This puts it in the ranks of the world’s top five supercomputing centers.
And if that wasn’t enough, the Dojo 2 supercomputer is on the horizon, promising to be 10 times more powerful than the first generation.
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The Reality Check: Why Major Banks Are Sounding the Alarm
Despite the ambitious AI spending, there’s a troubling trend afoot.
Tesla’s annual capital expenditure forecast has been consistently lowered.
- In its Q1 report, Tesla dropped its 2025 capex estimate from over $11 billion to “exceeding $10 billion.”
- Now, that number has been revised down again to $8 billion USD.
This reduction points to a growing concern: cash flow.
And Wall Street is taking notice.
On June 17, Wells Fargo (Fùguó Yínháng 富国银行) issued a stark warning, citing “deteriorating fundamentals.”
The bank’s report warned that Tesla’s free cash flow could turn negative for the first time since 2018.
As a result, Wells Fargo reiterated its “Sell” rating on Tesla stock with a price target of $120 USD.
Analyst Colin Langan also projected that Tesla’s Q2 vehicle deliveries would be just 343,000 units — a whopping 17% lower than consensus expectations.
The Numbers Don’t Lie: A Tough Q1 for Tesla
The warnings from firms like Wells Fargo aren’t coming out of nowhere.
Tesla’s Q1 2025 financial report painted a picture of significant decline across the board.
- Total Revenue: $19.335 billion USD, a 9% decrease year-over-year.
- Net Profit: $420 million USD, a steep fall from $1.405 billion USD in the same period last year.
- Net Profit (shareholders): $409 million USD, a staggering 71% decrease year-over-year.
- Total Vehicle Production: 362,615 units, down 16% year-over-year.
- Total Vehicle Deliveries: 336,681 units, down 13% year-over-year.
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The Robotaxi Gambit: Is This Tesla’s Path Back to Dominance?
While the present looks rocky, Tesla is making a hard pivot toward its next big thing: Robotaxi.
The company planned to kick off trial operations in Austin, Texas, as early as June 22, deploying about 10 Model Y SUVs for road testing.
Musk has stated a professional team will provide remote monitoring and intervention, though he noted the date could shift for safety reasons.
Many analysts see this as the critical next step.
Pacific Securities (Tàipíngyáng Zhèngquàn 太平洋证券) noted in a report that with the release of FSD (Full Self-Driving) V13.2, Robotaxi has made “critical progress.”
- FSD V13.3 has already completed unsupervised internal factory testing.
- FSD V14 is expected in the second half of 2025, focusing on pedestrian path prediction.
According to them, Tesla’s Robotaxi is officially entering its commercialization phase.
CITIC Securities (Zhōngxìn Zhèngquàn 中信证券) agrees, stating that the pace of Robotaxi commercialization has “significantly accelerated” in 2025.
They point to maturing L4 autonomous driving technology, noting that Waymo’s accident rate is already lower than human drivers, and US regulations are slowly relaxing.
The endgame? A massive improvement in vehicle utilization and reduced costs, driving a huge increase in the ride-hailing market.
Minsheng Securities (Mínshēng Zhèngquàn 民生证券) believes Robotaxis will slash labor costs by providing round-the-clock service without a driver.
While the initial phase will still require safety operators, the goal is to phase them out as the tech matures, further reducing costs.
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The Bottom Line: A High-Sakes Bet on an AI-Powered Future
Tesla is at a crossroads.
Its core business of selling cars is facing serious headwinds, sparking warnings from major banks and forcing it to cut back on spending forecasts.
At the same time, the company is pouring billions into a high-risk, high-reward vision for an autonomous future powered by AI.
The big question is whether Tesla’s future bets can pay off before its current reality catches up.
Ultimately, Tesla’s massive AI and Robotaxi investment is a bold, all-in gamble that will define the company’s next chapter.
References
- 马斯克自曝特斯拉AI投资，大行警告特斯拉面临基本面恶化，自由现金流可能转负 – National Business Daily (每日经济新闻)
- Exclusive: Tesla cuts output target at Shanghai plant to 4-day week – sources – Reuters
- Tesla to Launch Robotaxi Pilot in Austin, Musk Says – Yahoo Finance (via Bloomberg)
- Wells Fargo reiterates Underperform on Tesla, sees stock falling to $120 – CNBC
