Electric vehicle giant Tesla released its fourth-quarter and full-year financial results , delivering a mixed performance. For the first time in 2025, both revenue and net profit declined, but adjusted earnings per share in the fourth quarter exceeded market expectations, driving the stock price up by more than 3% in after-hours trading. With its core automotive business under pressure, investors are turning their attention to long-term investments in autonomous driving, robotics, and AI, examining whether Tesla can successfully transform its business.
Annual revenue declined for the first time, and net profit was halved, reflecting the pressure on the core electric vehicle business.
Looking at the full year, Tesla's revenue for 2025 was $94.8 billion, a 3% decrease year-over-year, marking the first annual revenue decline since the company's inception. Net profit for the year fell to $3.79 billion, a 46% decrease year-over-year, hitting a near five-year low. The main drag came from the automotive business, with full-year automotive revenue declining by 10% year-over-year.
The reasons cited by outsiders include competition from China's BYD, escalating price wars in the electric vehicle market in multiple regions, and weakening demand in some markets, indicating that Tesla's core business is facing challenges.
Tesla CEO Elon Musk stated that the main reasons for the decline were "reduced vehicle deliveries" and "aging of some models," specifically mentioning that older models such as the Model S and Model X will be discontinued in succession.
Fourth-quarter EPS beat expectations; stock price surged in after-hours trading but then retreated.
Looking at the fourth quarter alone, Tesla's revenue was $24.9 billion, a 3% year-over-year decrease; net profit fell 61% year-over-year to $840 million. Tesla stated that the decrease in net profit was due to increased operating expenses, which will be used for artificial intelligence and other R&D projects.
Next, GAAP earnings per share (EPS) were $0.24, and after adjusting for one-time items, EPS reached $0.50, exceeding the market's previous expectation of $0.45, becoming a key factor supporting investor confidence. After the earnings report was released, Tesla's after-hours stock price also rose by more than 3% at one point, but the gains subsequently narrowed, falling back to near the closing price, reflecting the market's still conservative attitude.
Car sales declined, but the energy and services business continued to grow.
Looking at the breakdown of business segments, Tesla's automotive division saw revenue decline by about 10% year-over-year in both the fourth quarter and the full year, with full-year vehicle deliveries also falling by 9%, indicating that price competition and weak demand have not yet been fully digested.
However, its non-automotive businesses performed relatively well. Revenue from its energy generation and storage business grew 25% year-over-year in the fourth quarter, while revenue from services and other businesses increased by 18% year-over-year, becoming a significant source of gross profit this quarter. The continued growth in the deployment of its Megapack and Powerwall energy storage battery systems highlights that the energy business is gradually becoming an important stabilizer in Tesla's operating structure.
( Tesla's Q4 deliveries plummeted by 16%, BYD overtook it! Michael Burry explains why he didn't short )
Musk outlined his future vision, with Robotaxi and robotics remaining the main focus.
During the earnings call, Musk again focused the market's attention on the future of automation. He emphasized that Tesla's growth momentum will no longer rely solely on car sales, but will be built on the Robotaxi driverless taxi network and the Optimus humanoid robot.
We have already conducted driverless tests in Texas, USA, and plan to expand to multiple cities, while also advancing the Cybercab vehicle, a steering wheel-less vehicle designed specifically for autonomous driving. Additionally, we will be unveiling the third-generation production version of the Optimus robot this quarter.
Tesla CFO Vaibhav Taneja also announced that capital expenditures over the next year will be approximately $20 billion, with funds allocated to new factories, Optimus, and AI computing resources.
Bitcoin holdings remained unchanged, with a net after-tax loss of $239 million recognized.
Finally, regarding Bitcoin holdings, Tesla's digital asset column value decreased from $1.315 billion in the third quarter to $1.008 billion in the fourth quarter. Considering the recent decline in Bitcoin, I believe the company's holdings are roughly the same.
At the same time, Tesla also recognized a net loss of $239 million on its digital asset holdings.
Overall, Tesla's quarterly and annual financial reports clearly reflect the contradictory realities of its transformation period. From the pressure on its core automotive business and weakening financial data to today's after-hours stock price fluctuations, it reflects the market's temporary choice to wait and see regarding its longer-term narratives regarding AI, autonomous driving, and robotics. Investors are still waiting to see if these future blueprints can truly translate into sustainable revenue and profits.
This article, "Tesla's Financial Report Reveals the Growing Pains of Transforming into Automation and Robotics: First Annual Revenue Decline and 10% Shrinkage in Vehicle Deliveries," first appeared on ABMedia ABMedia .
