Tesla CEO Elon Musk has made it clear that he wants to rebrand the company as an AI firm, and it seems to be working. During a recent earnings call, Musk spent most of his time discussing Tesla's plans for artificial intelligence, autonomy, and robotics, leaving investors and analysts wondering about the company's core automotive business.

According to Morgan Stanley analyst Adam Jonas, the lack of attention paid to Tesla's automotive business was striking. "Almost no discussion of the core auto business," Jonas wrote in a note to clients. This is despite the fact that around 80% of the company's revenue still comes from its automotive business. Instead, Musk and other executives focused on Tesla's efforts to build humanoid robots and self-driving cars, which seem to be the company's new priority.

This shift in focus is not entirely surprising, given Musk's growing number of side projects, including SpaceX, X, xAI, Boring Company, and Neuralink. Additionally, his new role in the Trump administration, overseeing a controversial effort to slash costs by purging federal employees, has likely reduced the time he spends actively involved with Tesla. As a result, Musk's passion for AI and autonomy has taken center stage, leaving some to wonder if Tesla is still a car company at its core.

Despite the lack of discussion about Tesla's automotive business, investors seem to be buying into Musk's vision for the company's future. Tesla's stock price dipped initially but then soared in after-hours trading, indicating that investors are confident in the company's direction. However, some analysts have raised concerns about the company's car business, which has seen sales decline year over year for the first time in over a decade. Vehicle production in 2024 was down 4% compared to 2023, and deliveries were down 1%. The company's vehicle lineup is also looking a bit stale, with the newest model, the Cybertruck, failing to generate the same level of excitement as previous models.

When asked about the expected elimination of federal EV incentives and tax breaks under the Trump administration, Musk dodged the question, instead waxing philosophical about the inevitability of sustainable transportation. This has left some to wonder if Tesla is prepared to adapt to a changing regulatory landscape. Meanwhile, the company's competitors are continuing to roll out new models in a variety of segments and at different price points, putting pressure on Tesla to keep up.

As Tesla continues to shift its focus towards AI and autonomy, it remains to be seen how this will impact the company's automotive business. While investors seem to be on board with Musk's vision, some analysts are raising concerns about the company's ability to balance its multiple priorities. One thing is clear, however: Tesla is no longer just a car company, and its future direction will be shaped by its ambitions in AI and beyond.