All in AI! Stop viewing Tesla as just a car company

Deutsche Bank's latest research report believes that Tesla is no longer just an automotive company, but a long-term investment target betting on artificial intelligence, robotics, and autonomous driving, redefining Tesla as a technology enterprise "fully committed to physical AI."

This judgment stems from the strategic direction exhibited after Tesla's latest financial report. Deutsche Bank analyst Edison Yu and his team pointed out that Tesla plans to increase capital expenditures by more than double, possibly exceeding $20 billion, with most of the funds directed towards AI training systems, data centers, custom chips, robotics 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 a more conservative expectation regarding vehicle sales and the speed of new model launches, while the bank has readjusted its valuation framework, valuing fully autonomous driving (FSD), robotaxi, and robotics as independent businesses.

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

Surge in Capital Expenditures, AI Infrastructure Becomes Key Focus

Tesla is undergoing a capital-intensive transformation. According to Deutsche Bank's estimates, billions of dollars will be invested solely in computing infrastructure to support large-scale training for autonomous driving and robotics systems. The management's goal is to "structurally disrupt labor-intensive services" through vertical integration.

The autonomous driving and robotics business has become the core of Deutsche Bank's long-term outlook. The bank noted that Tesla currently has 1.1 million FSD subscription users, and this business is expected 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.

For Tesla's humanoid robot Optimus, analysts hold an optimistic yet realistic attitude. They warn that complex engineering challenges, new supply chain construction, and slow early production will limit near-term output.

High-Risk, High-Reward Strategic Transformation

Deutsche Bank also highlighted several risk factors in the report, including weak demand for electric vehicles, intense competition, high execution thresholds in AI and robotics, regulatory scrutiny, and Tesla's reliance on Elon Musk personally.

Nevertheless, the bank believes that Tesla's scale advantages, data accumulation, and vertical integration capabilities give it strong competitiveness in the event of strategic success. Deutsche Bank positions this report as an assessment of a company undergoing significant transformation: while short-term forecasts have been downgraded, the real story is that Tesla is striving to become a leader in the AI-driven mobility and automation sectors, with the potential to reshape multiple industries over the next decade