All in AI! Stop thinking of Tesla as just a car company anymore.

Deutsche Bank’s latest research report suggests that Tesla is no longer just an automaker but a long-term investment target betting on artificial intelligence, robotics, and autonomous driving. It redefines Tesla as a tech company fully committed to physical AI.

This judgment is based on Tesla’s latest financial report and strategic direction. Deutsche Bank analyst Edison Yu and his team noted that Tesla plans to more than double capital expenditures, potentially exceeding $20 billion, with most funds allocated to AI training systems, data centers, custom chips, robotic factories, and new platforms.

Deutsche Bank maintains a buy rating on Tesla but has lowered its target price from $500 to $480. The downgrade reflects more conservative expectations for vehicle sales and the pace of new model launches, while the bank has also adjusted its valuation framework to treat fully autonomous driving (FSD), robotaxi, and robotics as separate businesses.

In Deutsche Bank’s model, Tesla’s long-term value now primarily comes from software, autonomous driving, and robotics, rather than vehicle sales.

Surging Capital Expenditures, Focus on AI Infrastructure

Tesla is undergoing a capital-intensive transformation. Deutsche Bank estimates that billions of dollars will be invested separately in computing infrastructure to support large-scale training of autonomous driving and robotic systems. Management aims to vertically integrate to “disrupt labor-intensive services structurally.”

Autonomous driving and robotics have become core to Deutsche Bank’s long-term outlook. The bank notes that Tesla currently has 1.1 million FSD subscriptions, and expects this business to eventually generate up to $10 billion in annual revenue. Deutsche Bank also anticipates that by the end of this decade, the robotaxi network will expand to hundreds of thousands of vehicles, with annual revenue exceeding $15 billion.

Regarding Tesla’s humanoid robot Optimus, analysts are optimistic but realistic. They warn that complex engineering challenges, new supply chain development, and slow early production will limit short-term output.

High-Risk, High-Reward Strategic Transformation

Deutsche Bank’s report also highlights several risk factors, including weak demand for electric vehicles, fierce competition, high execution barriers in AI and robotics, regulatory scrutiny, and Tesla’s reliance on Elon Musk personally.

Nevertheless, the bank believes Tesla’s scale advantages, data accumulation, and vertical integration give it strong competitiveness if the strategy succeeds. Deutsche Bank characterizes this report as an assessment of a company undergoing significant transformation: while short-term forecasts are somewhat lowered, the real story is that Tesla is striving to become a leader in AI-driven mobility and automation, with the potential to reshape multiple industries over the next decade.

Risk Warning and Disclaimer

Market risks are present; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Invest accordingly at their own risk.