Tesla Bets Big on AI Robots, Batteries and a $20B Pivot

Tesla ( (TSLA) ) has been popular among investors this week. Here is a recap of the key news on this stock.

Tesla is rapidly reinventing itself from a pure electric-vehicle manufacturer into a broader “physical AI” and energy platform, a shift that is starting to reshape how analysts value the stock. Wedbush’s Daniel Ives doubled down on a bullish long-term view, calling Tesla one of the two key pillars of the emerging physical AI market alongside Nvidia. He argues that the company’s future will be driven less by car deliveries and more by high-margin software and autonomy, particularly the Full Self-Driving system, which he believes could see adoption jump from about 12% to as high as 50%. Tesla’s better-than-expected Q4 FY 2025 results, its decision to stop producing high-end Model S and X versions to free factory space for Optimus humanoid robots, and plans for autonomous “Cybercabs” underpin Ives’ $600 base-case price target, implying around 44% upside and an even more ambitious $800 bull case by 2026.

Operationally, Tesla has hit an important technical milestone by producing both the anode and cathode of its 4680 battery cells using a “dry” manufacturing process, a step that could lower costs, improve energy density, and shrink factory footprints. These in-house 4680 cells are already being used in some Model Y vehicles, boosting Tesla’s control over its supply chain amid tariff and trade uncertainty. At the same time, the company is embarking on an aggressive $20 billion capital spending program for 2026, including converting a former Model S/X plant to build Optimus robots and ramping up Tesla Energy, which is now manufacturing solar panels at a Buffalo, New York facility as it revisits rooftop solar. Investor sentiment remains mixed, however: despite the AI and autonomy narrative and speculation that Tesla technology could ultimately tie into a broader “Musk Metropolis” ecosystem with SpaceX and xAI, Wall Street’s consensus on TSLA is still a Hold, with average price targets around $401 per share implying modest downside from current levels and reflecting ongoing concerns over slowing EV sales and execution risk around Musk’s ambitious pivot.