Tesla CEO Elon Musk attends the Saudi-US Investment Forum in Riyadh, Saudi Arabia, on May 13, 2025.
Hamad Mohammed | Reuters
Tesla reported better-than-expected fourth-quarter results after the bell Wednesday, but annual sales fell 3%, marking the first time on record that the company posted an annual decline. Shares rose 3% in extended trading.
Here’s how the company performed compared to the expectations of analysts surveyed by LSEG:
Earnings per share: 50 cents adjusted, 45 cents estimated Revenue: $24.9 billion vs. $24.79 billion estimated
Auto sales have been weak in recent quarters as Tesla faces stiff competition around the world, particularly from China’s BYD.
Sales in the fourth quarter were down 3% from $25.7 billion in the same period last year, and the auto division’s sales were down 11% from $19.8 billion to $17.7 billion.
In its earnings release, the company said full-year sales fell to $94.8 billion from $97.7 billion in 2024. Tesla said the decline was due in part to “lower vehicle deliveries and lower regulatory credit income.”
Tesla reported earlier this month that car deliveries fell 16% in the fourth quarter and 8.6% for the full year. Deliveries are the closest thing to Tesla’s reported sales, but they are not precisely defined in the company’s shareholder communications.
Part of Tesla’s 2025 problems were related to CEO Elon Musk’s collaboration with President Donald Trump, his inflammatory political rhetoric and support for far-right figures in Europe. This caused a consumer backlash that continued throughout the year.
While Tesla’s core business is struggling, Musk is trying to focus investors’ attention on other areas. In particular, it touts the company’s nascent robotaxi business and Optimus, a humanoid robot that has not yet come to market.
Tesla launched a Robotaxi-branded ride-hailing app in 2025 and is operating a pilot service in Austin, Texas. Tesla executives announced last week that the company had placed human safety observers in several of its vehicles in Austin and conducted driverless passenger rides.
The company said in an investor document that it plans to cover seven additional U.S. markets in the first half of this year. Those cities are Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas.
Tesla announced that it has begun “tool development” in advance of production of the upcoming CyberCab. The CyberCab was previously advertised as a two-seater, “private” driverless vehicle with no steering wheel or pedals.
As for robots, Tesla said it plans to unveil the third generation of Optimus this quarter. “The third generation is our first design intended for mass production,” the company said. Tesla is developing Optimus with the goal of one day selling it as a bipedal, intelligent robot that can do everything from factory work to babysitting.
Net income for the quarter fell 61% to $840 million, or 24 cents per share, from $2.1 billion, or 60 cents per share, in the year-ago period, due to a 39% increase in operating expenses. Tesla said in a document that some of the cost increases were “driven by AI and other research and development projects.”
Energy generation and storage business sales increased 25% to $3.84 billion from $3.06 billion in the same period last year. Services and other segment sales increased 18% to $3.37 billion from $2.85 billion.
Tesla announced on January 16 that it had signed a deal to invest approximately $2 billion in Musk’s artificial intelligence startup xAI “as part of a recently announced funding round.” Earlier this month, OpenAI’s competitor announced it had raised $20 billion, exceeding its previous goal of $15 billion. Nvidia and Cisco Participating in a round.
The investment in xAI, along with the partnership, “is intended to enhance Tesla’s ability to develop and deploy AI products and services in the physical world at scale,” Tesla said.
Capital expenditures for the period were $2.39 billion, down 14% from $2.78 billion in the same period last year.
Capital spending is likely to be a key theme on the earnings call as investors await announcements about the chip technology that will support Tesla’s self-driving and robotics efforts. At Tesla’s annual shareholder meeting in November, Musk said the company would work with Samsung and Taiwan Semiconductor Manufacturing Co. to produce new chips.
The conference call between Tesla and analysts is scheduled to begin at 5:30 p.m. ET.
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WATCH: Robotaxis will be a major focus of Tesla’s earnings call
