# Tesla aims to shift profits from cars to AI and software

Digest AI · Business & Funding · published 2026-10-26T14:30:27Z

Canonical: https://digestai.news/story/tesla-aims-to-shift-profits-from-cars-to-ai-and-software

## Summary

Elon Musk’s Tesla is pivoting toward AI and software as its next profit driver, according to *Ars Technica*. While car sales still account for 75% of Tesla’s revenue, the company is betting on recurring revenue from AI-powered services to compete with Big Tech and Chinese automakers investing heavily in autonomous driving technology.

Musk’s recent stunt with a Roadster using SpaceX thrusters highlighted Tesla’s engineering prowess, but the bigger focus is on software. Analysts note Tesla’s 2030 goal of selling 5 million vehicles (down from a previous 20 million target) hinges on its *Full Self-Driving* software, which remains limited to assisted driving. Chinese rivals are outpacing Tesla in both EV sales and AI-driven tech, forcing automakers to rethink their business models.

## Key points

- Tesla’s car sales generate 75% of its revenue, but AI and software are the target for future profits
- Musk’s 2030 vehicle sales goal reduced to 5 million from 20 million due to competition
- Chinese automakers are investing heavily in AI and autonomous driving, pressuring Tesla

## Why it matters

Tesla’s shift signals a broader industry trend: automakers must monetize software and AI to sustain growth amid falling EV margins and rising Chinese competition.

## Sources

1. [Tesla wants AI and software to be its next profit engine](https://arstechnica.com/cars/2026/10/tesla-wants-ai-and-software-to-be-its-next-profit-engine) (Ars Technica AI, 2026-10-26)

## Cite

Digest AI, "Tesla aims to shift profits from cars to AI and software", 26 October 2026, https://digestai.news/story/tesla-aims-to-shift-profits-from-cars-to-ai-and-software

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