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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.

Shortly after Transportation Secretary Sean Duffy took office in February, the DOT suspended the $5 billion National Electric Vehicle Infrastructure Formula Program, which was part of the Infrastructure Investment and Jobs Act that Biden signed into law in 2021.

The Trump administration has pursued a number of policies to boost the sale of gas-powered vehicles and cut EV incentives for automakers and consumers.

BYD, a company Elon Musk once dismissed by laughing at their products during a 2011 Bloomberg interview, has overtaken Tesla to be the world’s top EV seller. BYD said on Thursday that sales of its battery-powered cars rose nearly 28% to 2.26 million units in 2025. Vehicle deliveries at Tesla dropped 8% year on year to 1.64 million vehicles delivered in 2025.

Ford is ending production of the fully-electric F-150 Lightning as part of a broader companywide shakeup of its electric vehicle plans, the company announced Monday. In its place, Ford will sell what’s known as an “extended range electric vehicle” version of the truck, which adds a gas generator that can recharge the battery pack to power the motors for over 700 miles.

Ford revealed the F-150 Lightning in 2021, two years after it first announced plans for an all-electric Mustang, the Mach-E. Ford teased a $40,000 price tag for the Lightning, which was meant to be a flagship product for the company’s $22 billion push into electric vehicles. Like most large electric trucks, though, the F-150 Lightning struggled in the U.S. market. Part of that was because the $40,000 price tag never materialized for most buyers, as that base trim was targeted specifically at fleet customers. Ford wound up selling around 7,000 Lightnings per quarter over the last two years, with a peak of nearly 11,000 in the fourth quarter of 2024. EVs have faced a lot of headwind since the F-150 Lightning was first introduced. Tesla kicked off a dramatic price war to counter falling sales, which ate into legacy automakers’ thin (or negative) margins. The reelection of Donald Trump, along with Republicans taking control of Congress, has led to a reversal of many Biden-era policies meant to encourage the sale of electric vehicles.

Ford’s electric pickup has been America’s best-seller for quite some time, but digging deeper into the numbers reveals why Ford chose gas and hybrid trucks to bring in higher profits. The company sold 10,005 F-150 Lightning EVs in the third quarter, a healthy 39.7% increase year-over-year, but nowhere near the 207,732 F-Series trucks sold during the same period.

“For larger retail, electric utilities, the economics are unresolvable,” Farley said. “These customers have very demanding use cases for an electric vehicle. They tow, they go off-road, they take long road trips. These vehicles have worse aerodynamics and they're very heavy, which means very large and expensive batteries.”

A Ford spokesperson later clarified to InsideEVs that Farley was specifically referring to large, customer-focused "utility" vehicles—SUVs like the Ford Expedition and so on. Despite some setbacks and the cancellation of its large three-row SUV, Ford is far from done with EVs, however. The automaker is planning a midsize all-electric truck that is a kind of quasi-F-150 Lightning successor; a family of from-the-ground-up EVs on its so-called "skunkworks" platform; and a broadened series of electrified vehicles, including hybrids and extended-range electric vehicles (EREVs), which Farley elaborated on during the call.