You know a company is going through something horrendous when it looks at its two oldest luxury products and says, “Yeah… let’s kill those and build humanoids instead.”

That’s pretty much what Tesla just did.

After yesterday's bell, Elon Musk’s favorite science experiment dropped Q4 earnings and confirmed the thing Tesla bros thought they wouldn’t hear muttered for 30-40 years (you might want to sit down for this)... annual revenue fell for the first time ever.

(Source: Electrek)

Not “slowed.” Not “flattened.” Like fell down the stairs and broke its hip. Down 3% to $94.8B, snapping a decade-long streak that once made Tesla the chosen one of the EV era.

Fourth-quarter revenue slid to $24.9B. Adjusted profits beat expectations (because expectations were already on their last leg), but actual net income cratered 61% year-over-year. I guess all this proves the theory that building cars, robots, AI models, and a billionaire’s multiverse of side hustles is… expensive.

And then Elon did the most Elon thing imaginable.

He grabbed the wheel, yanked it hard, and said: “Cool story, but we’re done pretending this is a car company.”

And just like that Tesla announced it’s officially scrapping the Model S and Model X (the OG flex mobiles that helped build the brand) and converting its California factory into a production hub for Optimus humanoid robots. Yes, the robots. The ones that were once guys in spandex doing the robot at AI Day. Those.

“That’s slightly sad,” Musk said, in the same tone my friend once used when deleting an old playlist. “But it’s part of our shift to an autonomous future.” Translation: cars are mid af, robots are hot.

Tesla is now openly branding itself as a “physical AI company.” Which is Elon begging the market: please value us like Nvidia.

But it gets even funnier… to support the pivot, Tesla plans to spend over $20B this year alone on factories and AI infrastructure. Nearly double last year. Surprisingly, Wall Street was totally chill about it… because as long as the adderall-fueled roadmap points toward robotaxis and humanoids, the multiple stays inflated.

Oh, and while shareholders were still digesting the whole “no more S and X” thing… Ashley St. Clair’s baby daddy decided to drop another bomb: a $2B investment into Musk’s AI startup, xAI.

(Source: Wall Street Journal)

Friendly reminder: shareholders previously voted not to do that. The resolution technically didn’t pass thanks to a pile of abstentions. Tesla went ahead anyway, because when you’re chasing $25T dreams, shareholder input is more of a suggestion box.

Musk has repeatedly claimed Tesla could be worth anywhere from $5T to $25T once robotaxis and Optimus scale. His actual compensation package requires Tesla to hit $8.5T and sell millions of robots and autonomy subscriptions. Coincidence? Absolutely not.

Meanwhile, the core car business is catching hands.

BYD officially overtook Tesla as the world’s largest EV seller. Europe registrations dropped 21%, regulatory credit revenue fell 22% after the U.S. neutered emissions penalties, and EV tax credits vanished altogether thanks to his former BFF (the Trumpster).

There was however one bright spot by the name of software.

Tesla revealed it now has 1.1 million Full Self-Driving subscribers, up 38% in the quarter. FSD is moving to a subscription-only model soon, because recurring revenue sounds way sexier than selling sedans.

Meanwhile, robotaxis are allegedly expanding to seven more U.S. cities this year. Europe and China approvals are also “imminent,” which, historically, is Elon time for sometime between next month and the heat death of the universe. 

Call it cope, call it group hallucination, but investors aren’t sweating it. Because the moment the EV growth story flatlines, the AI fantasy multiple snaps on like a life raft. And suddenly, everyone agrees Tesla was never really a car company… it was a robotics lab that accidentally sold sedans to fund the dream.

So pour one out for the Model S and Model X. The robots run the show now.

At the time of publishing this article, Stocks.News holds positions in Tesla as mentioned in the article.