Tesla’s making a bold bet on robots and artificial intelligence. The electric car maker is shifting away from being just an automaker and moving toward becoming a tech company focused on self-driving cars and robotaxis.
Tesla’s new strategy centers on its Full Self-Driving technology and plans for robotaxis that don’t need human drivers. The company wants to replace traditional rideshare drivers with autonomous vehicles, which could cut costs but also eliminate gig economy jobs. Tesla’s building these robotaxis on its new Redwood platform, which will also serve as the foundation for a $25,000 electric car aimed at everyday buyers.
The change comes at a tough time financially. Tesla’s profits dropped 71% in the first quarter of 2025, falling to just $400 million. The company’s betting that its new manufacturing methods will help save money. Its next-generation factories use modular assembly that’s 40% faster than traditional car building. Parts snap together like Legos, and AI systems handle most of the work. These factories need only 700 workers compared to 3,000 at typical car plants.
But Tesla’s facing serious challenges. U.S. regulators are investigating accidents linked to the Full Self-Driving system. The company’s also paying traffic fines in China when its self-driving cars make mistakes. These safety issues are making some customers nervous about the technology. Tesla’s FSD remains classified as Level 2 automation, meaning drivers must supervise the system at all times despite its advanced capabilities. Meanwhile, executive departures continue to plague the company, with high-profile exits including North American and European operations chief Omead Afshar in June 2025.
Tesla’s timeline keeps changing too. The company originally planned to launch production in 2025 but now expects major growth in 2026. It’s planning factories in Texas, Mexico, and other locations around the world. The goal is to eventually make 20 million vehicles per year. The initial rollout of fully robotic cars will be small, with the company hoping to deploy millions by 2026.
The company’s avoiding traditional car dealerships and plans to control how its vehicles reach customers, especially for its future robotaxi networks. Tesla studied Honda’s Civic to learn how to cut costs and make cheaper electric cars.
Whether Tesla succeeds depends on getting its $25,000 car to market successfully. With sales of current models slowing down, the company needs this affordable option to work. It’s a risky move that could either elevate Tesla into a tech giant or leave it struggling to compete.