Tesla(US:TSLA) Sou Hu Cai Jing·2026-01-30 14:40Core Viewpoint - Tesla's decision to invest $2 billion in Elon Musk's private AI company xAI comes amidst a significant decline in its profits, with a reported 61% drop in Q4 of FY2025, raising concerns among investors [2][3]. Financial Performance - Tesla's Q4 revenue decreased by 3% to $24.9 billion, and the total revenue for FY2025 also fell by 3% year-over-year to $94.8 billion [3]. - The company's electric vehicle sales in 2025 saw a 9% decline compared to the previous year, with a gap of nearly 600,000 units behind BYD, which has become the global sales leader in electric vehicles [3]. Investment in xAI - Tesla's investment in xAI is surprising, especially after shareholders recently voted against a non-binding proposal to invest in the company, with more votes against than in favor [2]. - xAI's valuation has skyrocketed from $24 billion in summer 2024 to $120 billion, indicating significant growth potential [2]. Strategic Shift - Tesla is undergoing a strategic shift towards AI and robotics, with executives indicating a future focus on service models, such as robotaxi services, rather than solely increasing vehicle sales [13]. - The investment in xAI is seen as a critical step in this transformation, as Tesla aims to pivot from electric vehicle sales to AI and robotics technology [15]. Controversies and Challenges - The investment has faced strong opposition from shareholders, who are concerned about Musk's use of Tesla's resources for personal AI ambitions [13]. - xAI's operations have come under scrutiny from the EPA due to the use of diesel generators at its Memphis data center, raising environmental concerns [13]. - Tesla's reputation has declined in traditional markets like California and Europe, impacting its electric vehicle sales, particularly after Musk's involvement in partisan politics [15].