Tesla Q4 Results: Elon Musk-led Tesla’s annual profit has fallen to its lowest level since the pandemic, marking a tough year for the electric vehicle
giant. The company has also lost its position as the world’s biggest EV maker to a Chinese rival, while global boycotts and weakening demand have hit vehicle sales hard, according to a report. Tesla reported on Wednesday that its net income for last year plunged 46 per cent to USD 3.8 billion — the second consecutive year of a sharp decline, according to the Associated Press. This fall came despite the launch of cheaper models and Musk’s repeated assurance that he would stay fully focused on Tesla after his brief involvement in US politics. Despite the challenges, Tesla’s stock has risen 9 per cent over the past year.
From cars to robots: A new Tesla story
Musk is now pushing a new narrative for Tesla — shifting the focus from car sales to artificial intelligence, robotaxis and humanoid robots. He has been urging investors to look beyond vehicles and imagine a future where self-driving robotaxis ferry people around cities and robots help with everyday tasks like watering plants or caring for the elderly, AP reported.
Reinforcing this shift, Musk announced during the earnings call that Tesla will shut down production of its older Model S and Model X cars in the second quarter, the international news agency said. The Fremont factory in California will instead be converted to produce Tesla’s Optimus robots.
To fund these ambitions, Tesla plans to spend aggressively on AI and new projects. The company said it will more than double its capital expenditure to USD 20 billion this year.
According to AP, Tesla also disclosed that it recently invested USD 2 billion in Musk’s AI company xAI — raising concerns about potential conflicts of interest, as Musk holds major stakes in both firms. xAI, known for its Grok AI assistant, has already courted controversy over sensitive content and political positions.
Weak profits, mixed signals
Tesla’s fourth-quarter profit fell sharply as well, dropping 61 per cent to USD 840 million. However, on an adjusted basis, earnings came in at 50 cents per share, slightly better than analysts’ expectations of 45 cents.
Industry experts remain cautious
"They’ve got ageing products that are becoming less competitive as other manufacturers launch new models. Then there is the general brand damage," said Telemetry analyst Sam Abuelsamid. "Musk’s political involvement has also turned off customers."
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