Tesla’s profit fell 46% in 2025 compared to the prior year, as CEO Elon Musk assumed a role in the Trump administration and federal electric vehicle subsidies were killed off by Congress, causing sales to plummet.
The electric vehicle company reported Wednesday that it recorded just $3.8 billion in profit across 2025, its lowest tally in years. Total revenue from car sales fell 11% year-over-year, too. Tesla already revealed that it shipped 1.63 million cars globally across 2025. That 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 the decline in sales in Tesla’s fourth quarter and full-year results for 2025, and the company beat Wall Street’s estimates for earnings and revenue, sending shares up in after-market trading Wednesday. It’s been largely buoyed by strength in its other industries and investments, including energy capabilities and AI, as Tesla has continued to lure investors’ attention away from its stalled-out automotive business.
The company wrote in its shareholder letter: “2025 marked a critical year for Tesla as we further expanded our mission and continued our transition from a hardware-centric business to a physical AI company.”
The company revealed in the letter that it recently invested $2 billion in Elon Musk’s artificial intelligence startup xAI, part of the latter’s recent 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 was even able to grow its gross margin compared to prior quarters.
Long-awaited projects like the Tesla Semi (first revealed in 2017) and the Cybercab (which debuted in 2024, but has been teased for years) are supposed to enter production in the first half of this year, according to Tesla.
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Tesla has a lot of other projects on its plate, which were detailed in the shareholder letter. The company has started pilot production at its lithium refinery in Texas. It’s developing new in-house inference chips for its autonomy and robotics programs. And it plans to reveal the third-generation version of its Optimus robot in the first quarter of this year.
This story is developing …
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