Tesla (TSLA) Posts Fourth-Quarter Profit That Beats Expectations - Bloomberg

The EV maker is increasingly emphasizing the potential of artificial intelligence, driverless technology and humanoid robots to drive future growth as its traditional business of selling automobiles struggles.

The EV maker is also halting production of its S and X model vehicles and will repurpose the production facilities in Fremont, California, for Optimus. The Model S, a luxury sedan that costs about $95,000 and the Model X, an SUV with a pricetag of nearly $100,000, are low volume vehicles compared to Tesla’s more affordable 3 and Y models.

Adjusted earnings per share were 50 cents in the quarter, Tesla said Wednesday, higher than the average of analyst estimates. The results snap a string of quarters in which profit was weaker than expected.

The profit beat helps offset disappointment stemming from a steady decline in vehicle sales: Tesla earlier this month reported a 9% decline in 2025 deliveries from the previous year. That slump sharpened in the fourth quarter, when deliveries dropped 16% from a year earlier.

Revenue from regulatory credits fell 22% in the fourth quarter from a year earlier, showing how a lucrative revenue stream is drying up. The company receives the payments from competitors who exceed federal fuel economy standards. That income has dropped after the Trump administration eliminated penalties for automakers that failed to meet the standards. Due to the lower regulatory credit revenue and a drop in vehicle deliveries, Tesla’s 2025 revenue declined for the first time.

The company reported 1.1 million active subscribers for its Full Self Driving driver assistance software — up nearly 40% from a year earlier. The software, which currently is not considered autonomous and requires constant human supervision, is becoming subscription-only starting after Feb. 14.

Robotaxi launched in Austin in June. This month, Tesla started rolling out “a few” robotaxis without human driver supervision in Austin. It plans to scale this to its entire Austin fleet over time. The company also operates a rideshare service on the same app in the San Francisco Bay Area that is not considered autonomous and has drivers in the front seat. It also has permits to test the service in Nevada and Arizona.