Tesla’s profits fall 46% in 2025

Tesla’s profits fell 46% in 2025 from the previous year, as CEO Elon Musk took a role in the Trump administration and Congress eliminated federal subsidies for electric vehicles, causing sales to decline.

The electric car company reported Wednesday that it posted just $3.8 billion in profits through 2025, its lowest figure in years. Total revenue from auto sales was down 11% year over year as well. Tesla has already revealed that it will ship 1.63 million cars globally by 2025. This marks the second year in a row that its sales have declined, after Musk spent years promising average annual growth of 50%.

Investors largely expected Tesla’s fourth-quarter sales and 2025 full-year results to decline, and the company beat Wall Street estimates for earnings and revenue, sending shares higher in post-market trading on Wednesday. It has been largely buoyed by strength in its other industries and investments, including energy and artificial intelligence capabilities, as Tesla continues to draw investor attention away from its stalled auto business.

“2025 was a critical year for Tesla as we expanded our mission and continued our transition from a hardware-centric company to a true AI company,” the company wrote in its shareholder letter.

The company revealed in the letter that it recently invested $2 billion in Elon Musk’s AI startup, xAI, part of the latter’s latest venture. Series E funding round.

Revenue from Tesla’s solar and energy storage businesses also grew 25% compared to 2024, and services revenue (which includes payments for full self-driving software, insurance, parts and supercharging) grew 18%. The company even managed to increase its gross profit margin compared to previous quarters.

Long-awaited projects like Tesla Semi (first revealed in 2017) and Cybercab (which debuted in 2024, but has been questioned for years) should enter production in the first half of this year, according to Tesla.

Tesla has a lot And other projects on its board that were detailed in the shareholder letter. The company has begun trial production at its lithium refinery in Texas. It is developing new in-house reasoning chips for its autonomy and robotics software. It plans to unveil the third generation version of its Optimus robot in the first quarter of this year.

This story is evolving …