Tesla’s most recent quarterly earnings report showed declining vehicle sales and falling revenue, as CEO Elon Musk pivots the company’s future to AI and robotics. The earnings report described Tesla’s chaotic year as a “transition from a hardware-centric business to a physical AI company.”
The high hopes and grand prospects outlined by Musk helped Tesla beat Wall Street expectations, even as the company reported its first-ever decline in total revenue – a 3% decline year-over-year. After markets closed Wednesday, Tesla reported fourth-quarter earnings of $0.50 per share, beating Wall Street’s expectation of $0.45. Its reported revenue was $24.9 billion, beating analysts’ estimates of $24.79 billion.
The company’s total automotive revenue in 2025 is expected to decline 11% year-over-year. Earlier this month, Tesla reported its fourth-quarter vehicle delivery numbers, which measure buyers’ receipt of cars rather than dealership sales, which showed 16% decline Hurt by cratering interest from year to year, especially in Europe. The company’s stock rose nearly 4% in after-hours trading.
As Tesla’s vehicle sales declined last year, Musk and the company have emphasized a shift toward AI-powered projects like the Optimus consumer robot and self-driving robotaxis. All of these technologies are unproven and not widely available to the public, let alone profitable, but they have allowed Musk to claim that the company will see unparalleled growth in the future, with little to show for it today.
Musk has said that Optimus will be the “biggest product ever” and said that robots, along with autonomous vehicles, will “herald a world where there is no poverty”. According to the earnings report, Tesla plans to start production of the Optimus before the end of 2026. Musk has said that the company will do this sell robots to the public In 2027. Tesla also revealed that earlier this month it had agreed to invest $2 billion in Musk’s artificial intelligence company xAI.
Although Tesla’s share price fell last year during Musk’s tumultuous time in government, it hit an all-time high in December amid a buzz in the market for AI investments and Musk’s promise to build a “robot army.” Last month, Tesla shareholders also approved a pay package for Musk, under which he could be awarded up to $1 trillion in compensation if the company achieves several financial milestones.
While Tesla has touted its upcoming projects as proof of upcoming success, some of its former futuristic products have struggled. The company’s Cybertruck, which Musk said earlier this month is “the best vehicle Tesla has ever made,” saw a massive 48% decline in sales last year. kelly blue book report.
Tesla has faced increasing competition from other electric vehicle companies, primarily China’s BYD, which overtook Tesla as the world’s largest electric car maker last year. BYD’s sales to rise 28% in 2025 as it offers consumers in multiple markets less expensive options For Tesla models.
