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Did Tesla CEO Elon Musk spend months or even years? — is trying to position his company as more than just an electric car maker. When Tesla acquired Solar City in 2016, he (and his communications team) pitched the company as a sustainable energy company. Over the past year, he has promoted the idea of Tesla as an AI and robotics company.
Mr. Musk’s ambitious branding is in direct conflict with financial reality. The majority of the company’s revenue comes from EV sales. The latest earnings bear this out.
The company generated revenue of $94.8 billion in 2025. Of this amount, $69.5 billion came from EV sales and leases and related regulatory credits. The remaining $25 billion will be split roughly between energy generation (solar) and storage businesses and “services and other,” which includes revenue from superchargers, parts sales, and fully self-driving subscriptions. Reliance on deliveries means that as EV sales decline, so does Tesla’s overall balance sheet. Profits in 2025 were down 46% from the previous year.
Tesla has been trying to grow its non-EV business to offset declining sales, and its fourth quarter and full-year earnings reports (and accompanying announcements) signaled a move beyond relentless AI and robot talk to action. For now, that action includes making money and not making money. Musk has repeatedly stressed that 2026 will be a year of massive capital spending, with spending more than doubling to $20 billion and pushing cash flow into negative territory.
For example, Musk announced that Tesla would end production of the Model S and Model X, but this was more symbolic than material. These two models account for about 2% of Tesla’s sales, a point Barclays analyst Dan Levy also pointed out in his latest note. Still, for Tesla and the broader auto industry, this was a remarkable end-of-an-era moment, one that changed forever when the Model S was launched in 2012.
What Tesla is planning now is a more substantial move.
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Tesla plans to fill production gaps in Model S and Model X with Optimus, a humanoid robot that will be manufactured at its Fremont, California, factory. Musk also said he plans to expand Tesla’s robotaxi business to more cities in 2026 and even hinted at the need for Tesla to build a TerraFab factory to shore up its chip supply.
But the item that really stood out to me, and Elon’s true circular economy deal, was Tesla’s plan to invest $2 billion in Musk’s other company, xAI, hinting at plans to bring the two companies closer together. Meanwhile, other news outlets are reporting that talks are underway about a possible merger (in some combination) of three of Musk’s companies: SpaceX, Tesla, and xAI.
But let’s back to reality for a moment and review Tesla’s current business. Although sales are down year-over-year, the small-scale energy storage business is generating positive profits.
small bird
I’m not ready to share all the details yet, but I heard from a small bird that there’s some activity on the fundraising front for Waymo. You probably saw reports last month that Waymo raised up to $15 billion in a round led by parent company Alphabet. According to my conversations, it’s still in the $15 billion “zone”, with the majority of that coming from Alphabet, with high interest in participation from outside investors. One of the little birds mentioned that one of the other investors might be an OEM (original equipment manufacturer).
Please stay tuned for further information.
Any tips? Email Kirsten Korosec at kirsten.Korosec@techcrunch.com, email my Signal at korosec.07, or email Sean O’Kane at sean.okane@techcrunch.com.
Great deal!
Waabi earns the “Deal of the Week” badge for me not just because it has a dollar number on it. The self-driving car startup has raised $750 million in a Series C round co-led by Khosla Ventures and G2 Venture Partners, and another $250 million in milestone funding from Uber to support the deployment of more than 25,000 Waabi Driver-powered robotaxis exclusively on its platform.
Uber is already a backer of Waabi, participating in early 2021 pay raises. But this is about more than money. Waabi initially focused on applying its self-driving car technology to self-driving trucks. The deal with Uber is a declaration that the company intends to extend its technology to multiple self-driving industries with a single technology stack.
Can Wabi do that? Others tried and retreated. Waymo has discontinued its self-driving truck program to focus on robotaxis. Aurora, which is also an investor in Waabi, also worked on both trucks and robotaxis before deciding to focus solely on big rigs.
Other sales that caught my attention…
Gatik AI, a startup developing self-driving trucks focused on the “middle mile,” has signed a deal with a major (unnamed) consumer goods company. This is why it’s important. The deal will generate revenue of $600 million over five years. These are unmanned transport vehicles, with no safety driver behind the wheel. These Gatic trucks operate 24 hours a day, transporting ambient, chilled and frozen goods between distribution centers and stores, and have been unmanned since mid-2025. The company says it has successfully completed 60,000 fully driverless orders.
Luminar’s LiDAR business was sold to Redmond, Washington-based MicroVision for $33 million. The company, which is developing its own sensors, beat quantum computing in an auction of assets. TC’s Sean O’Kane interviewed MicroVision CEO Glen DeVos about Luminar’s plans. There was a bit of last-minute intrigue during the sales process, as a mysterious bidder with a much higher offer targeted Luminar’s lidar business.
Rad Power Bikes, which began bankruptcy proceedings about a month ago, has reached an agreement to sell itself to Life Electric Vehicles Holdings (or Life EV) for about $13.2 million. Taking into account Rad Power’s debt, the total bid would be $14.9 million. History lesson: Rad Power has raised $329.2 million since its inception and was once valued at $1.65 billion.
Redwood Materials has raised $425 million in a Series E round that includes Google as a new investor. The round was led by venture firm Eclipse and included strategic investments from NVIDIA’s venture capital arm, NVentures, as well as existing investors Capricorn and Goldman Sachs. Read the full story to find out what Redwood is up to in the nation’s capital.
Notable reads and other trivia
Obi, a company that aggregates real-time pricing and ride times for multiple ride-hailing services, shared new data about ride-hailing and robotaxis in the San Francisco Bay Area. There are several takeaways, including how the price gap between Waymo and the ride-hailing services offered by Uber and Lyft is narrowing, so be sure to read the full article.
Uber has launched a new division called Uber AV Labs, but as senior reporter Sean O’Kane points out, this isn’t a ploy to restart development of its own robotaxis. This is a play on data sharing. Uber cars equipped with sensors collect data and share it with partners like Lucid, Waymo, and Waabi. Important note: No contract has been signed yet.
Waymo is currently authorized to operate a robotaxi service to and from San Francisco International Airport (SFO). The company plans to begin offering access to SFO to some passengers before rolling it out to all customers in the coming months. However, this victory comes with some stains. Waymo is under investigation by the National Highway Traffic Safety Administration and National Transportation Safety Board after the company reported that one of its robotaxis hit a child near an elementary school in Santa Monica on January 23.
San Francisco police are investigating an incident in which a Zoox self-driving car crashed into the driver’s side door of a parked car.
One more thing…
It’s been a few weeks since we’ve done a survey, so here’s a fun survey to share with you. What will be the name or ticker of Musk’s merged supercompany?
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