Tesla revenue falls for first time as Musk bets big on robots and autonomy

Summary

Tesla reported 2025 revenue of $94.8 billion, a 3% year‑on‑year decline — its first annual revenue drop since it began publishing results. Quarterly revenue fell to $24.9 billion, also down 3% year‑on‑year, though the company narrowly beat analysts’ expectations.

Automotive revenue slid 11% in the quarter as deliveries dropped: 418,227 cars were delivered in Q4 (a 15.6% fall versus the prior year) and deliveries for the year were down 8.6% — the steepest annual unit decline Tesla has reported. Net income plunged 61% in the quarter to $840 million; annual profit fell 46% to $3.8 billion.

Elon Musk used the earnings call to double down on autonomy and robotics. Tesla is reallocating Fremont factory space from Model S/X production to Optimus humanoid robot manufacturing, with ambitious volume targets. Musk said paid robotaxi rides are running in Austin “with no safety monitor” and predicted fully autonomous coverage across up to half of the US by year‑end if regulators permit. Production of the Cybercab (steering‑wheel‑free taxi) is due to start in April.

Tesla warned 2026 capex will exceed $20 billion to fund new factories, battery expansion, AI compute, Cybercab, Semi, Megapack and Optimus builds. Musk also floated building an in‑house semiconductor fab to mitigate supply and geopolitical risk. The company faces tougher competition (notably BYD) and political backlash tied to Musk’s public positions — all while revenue and profit momentum weaken.

Key Points

2025 revenue down 3% to $94.8bn — Tesla’s first annual revenue decline since 2010.
Q4 revenue $24.9bn, automotive revenue down 11% in quarter; deliveries fell 15.6% in Q4 and 8.6% for the year.
Net income plunged 61% in Q4 to $840m; annual profit down 46% to $3.8bn.
Musk is pivoting capital and factory space towards Optimus humanoid robots and the Cybercab robotaxi instead of some current car lines (Model S/X production to wind down at Fremont).
Tesla claims paid robotaxi services are already running in Austin with no safety monitor; aims for wide autonomous coverage in the US pending regulation.
2026 capital expenditure forecast to exceed $20bn to fund factories, batteries, AI compute, Cybercab, Semi, Megapack and Optimus — Musk also suggested a possible in‑house chip fab.
Competitive pressure from lower‑cost rivals (eg BYD) and political backlash around Musk complicate Tesla’s sales outlook.

Context and relevance

This is a notable inflection for Tesla: shrinking revenue and profits at the same time as leadership is shifting the company’s focus from cars to autonomy and robots. For investors, EV manufacturers, suppliers (batteries, chips, fabs) and regulators, the move signals where a major market player is allocating resources and risk. The story also ties into broader tech trends — heavy capex for AI compute, the race for advanced autonomy, and supply‑chain resilience through localisation of semiconductor capacity.

Author’s take (punchy)

Tesla’s numbers are a red flag, but Musk’s vision is full throttle: he’s placing a very large, very public bet that autonomy and robots will replace the growth the car business no longer provides. That’s bold — and expensive.

Why should I read this?

Because it explains, in one short read, why Tesla’s financials are wobbling and where the company is putting its chips (literally). If you follow EV markets, AI/robotics, semiconductors or investment risk, this tells you what to watch next — big spending, big bets, and big regulatory questions.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2026/01/29/tesla_revenue_drop/