Tesla profit tanked 46% in 2025 Sean O'Kane 1:16 PM PST · January 28, 2026 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.
“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 wrote in its shareholder letter.
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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Sean O'Kane Sr. Reporter, Transportation
Sean O’Kane is a reporter who has spent a decade covering the rapidly-evolving business and technology of the transportation industry, including Tesla and the many startups chasing Elon Musk. Most recently, he was a reporter at Bloomberg News where he helped break stories about some of the most notorious EV SPAC flops. He previously worked at The Verge, where he also covered consumer technology, hosted many short- and long-form videos, performed product and editorial photography, and once nearly passed out in a Red Bull Air Race plane.
You can contact or verify outreach from Sean by emailing [email protected] or via encrypted message at okane.01 on Signal.
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