Tesla has officially released its Q4 and full-year earnings for 2025, marking what the company calls a “critical year” in its evolution from a car manufacturer to a physical AI company. While automotive revenues saw a year-over-year decline, the company’s energy and AI sectors reached new milestones.
Tesla management stated that 2025 was the foundation for its future as a physical AI company. This shift includes the advancement of FSD (Supervised), the launch of the Robotaxi service, and the fine-tuning of the Optimus humanoid robot.
A major part of this strategy is a new $2 billion investment in xAI. This partnership includes a framework agreement to evaluate future AI collaborations, specifically aimed at bringing digital AI into the physical world at scale. Tesla is also building “Cortex 2” at Giga Texas to more than double its onsite AI training compute capacity by the first half of 2026.
The APAC region continues to be a highlight for the automotive sector, setting a new record for deliveries this quarter. In North America, preparations are underway for the production of the Tesla Semi and Cybercab, both of which are scheduled to commence in the first half of 2026.
The Robotaxi program reached a major milestone in December by testing driverless rides in Austin. In January, Tesla began removing safety monitors from customer rides on a limited basis. The service has also expanded to serve the San Jose Airport (SJC), with plans to move into other major regional airports once permits are secured. To date, cumulative paid Robotaxi miles have exceeded 600,000.
Regarding FSD (Supervised), Tesla is transitioning to a monthly subscription-only model this quarter and sunsetting the up-front payment option. In certain states, customers can now receive insurance discounts based on their FSD usage. The more a driver uses the software, the larger the discount, which in some cases can completely offset the monthly subscription cost.
Tesla’s energy division reported its 5th consecutive record quarter for gross profit, reaching $1.1 billion. This was driven by record deployments of the Megapack. In 2025, the Powerwall network supported over 89,000 Virtual Power Plant events, saving homeowners more than $1 billion in electricity bills.
On the manufacturing side, Tesla is now producing 4680 battery cells at Giga Texas using dry-electrode technology for both the anode and the cathode. This milestone is intended to simplify and lower the cost of battery production. Additionally, pilot production has begun at the new lithium refinery in North America.
Tesla continues to add value through over-the-air updates. New features highlighted in the deck include a “Phone Left Behind” chime, a SpaceX ISS Docking Simulator game, and automatic HOV lane routing that uses the interior camera to detect vehicle occupancy.
Looking ahead:
Tesla remains focused on building a world of amazing abundance through autonomous robots and clean energy infrastructure.
