Tesla’s AI and Robotics Focus: A Shift Away from Electric Cars

Tesla’s sky-high market valuation is largely based on its status as an AI and robotics company, rather than a traditional car manufacturer. The company’s goal is no longer to sell electric cars, but to create autonomous vehicles and robots that can replace human labor. This shift in focus is evident in its recent announcements and investments in autonomous technology.

Autonomy: A Growing Field with Multiple Players

Autonomy is being developed by multiple companies, including Waymo, which has already launched fully autonomous taxis in the United States. Chinese companies, such as BYD, are also aggressively pursuing autonomous technology, packaging it in electric cars that are significantly cheaper than Tesla’s offerings. For example, the BYD Seagull, priced at just $9,500, will soon feature BYD’s "God’s Eye" intelligent driving features.

BYD’s Expansion of Autonomous Technology

BYD, which has overtaken Tesla in sales in China, has announced that it will expand its autonomous technology to its mass-market models, including the Seagull and other cars. The company’s CEO, Wang Chuanfu, stated that "good technology should be available to everyone." The technology, developed in-house by BYD, will include features such as remote parking via smartphones and autonomous overtaking on roads.

China’s Prioritization of Electric Vehicles

China’s government has heavily prioritized the transition to electric vehicles, offering strong incentives to encourage adoption. BYD has managed to turn a profit on its electric vehicles, a feat that has heretofore only been accomplished by Tesla. The company’s success has allowed it to push into markets in Europe and South America, where Western brands are losing share.

BYD’s Business Model

BYD started out making batteries for other companies but eventually realized it could enter the electric vehicle industry itself. The company began manufacturing hybrid cars over 15 years ago and is now one of the top automakers in China. BYD’s business model is self-sustainable, and it no longer requires government support.

Tesla’s Autonomous Technology

Tesla’s Full-Self Driving (FSD) technology has not been able to launch in China due to the country’s strict rules prohibiting data from leaving the country. However, reports indicate that Tesla has been forced to train its autonomous technology on China’s complicated roadways by studying street-view images from the web. Tesla hopes to launch FSD in China in 2025, but its timeline has been criticized for being overly optimistic.

Tesla CEO Elon Musk’s Priorities

Tesla CEO Elon Musk has been spending much of his time in Washington, D.C. focused on other priorities, including arguing over the Hitler salute and cutting inconsequential line items from U.S. spending. President Trump has canceled the roll-out of funds for electric charging infrastructure, and it is expected that tax incentives given to buyers of EVs will be nixed. Western automakers are slowing their deployment of capital as the growth rate of sales has come down, and Tesla sales have fallen dramatically in key markets, including California and Germany.

Conclusion

Tesla’s focus on AI and robotics is a significant shift away from its traditional electric car business. The company’s valuation is largely based on its status as an AI and robotics company, rather than a traditional car manufacturer. As the world continues to transition to electric vehicles, companies like BYD are pushing into markets in Europe and South America, where Western brands are losing share. Tesla’s recent divisive political moves are having an impact on its sales, and the company’s autonomous technology is being developed by multiple players, including Waymo and BYD.