TLDR
- Tesla reports Q4 earnings Wednesday after hours with Wall Street expecting 43 cents EPS on $24.6 billion revenue, down from 73 cents on $25.7 billion last year
- Vehicle deliveries dropped 15% to 418,227 units in Q4 following September expiration of $7,500 federal EV tax credit
- Operating margins forecast below 5% as Trump administration policy changes reduce regulatory credit demand
- Earnings call at 5:30 p.m. ET Wednesday will focus on robotaxi expansion to Arizona and Nevada, FSD subscription shift, Optimus robot progress
- Tesla removed safety drivers from some Austin robotaxis last week with Morgan Stanley predicting 1,000 vehicles in fleet by year end
Tesla releases fourth quarter results Wednesday after the market closes. The headline numbers won’t impress anyone.
Wall Street analysts expect earnings of 43 cents per share on revenue of $24.6 billion. Compare that to last year’s 73 cents per share on $25.7 billion in sales.
The electric vehicle business hit a rough patch. Q4 deliveries totaled 418,227 vehicles, falling 15% from 495,570 units in the prior year period.
Annual deliveries tell the same story. Tesla moved 1.64 million vehicles in 2025, the second straight year of declining sales.
Several factors crushed demand. The federal $7,500 EV tax credit disappeared after September, creating a Q3 rush that emptied the pipeline for Q4.
Legacy automakers rolled out competitive EV models. Musk’s political involvement turned off certain buyers too.
Profit margins are sliding. Analysts project operating margins under 5%, down more than a percentage point from last year.
Regulatory credit sales are shrinking fast. Tesla generates revenue by selling zero-emission credits to other manufacturers. Trump administration policies reduced demand for these credits, cutting into profits.
Battery storage offered one positive data point. Tesla deployed 14.2 gigawatt hours of energy storage products in Q4, beating last year’s 11 gigawatt hours.
The Real Story Is Robotaxis
Traditional car metrics matter less now. Investors want robotaxi updates during the 5:30 p.m. Eastern time earnings call Wednesday.
Tesla operates driverless rides in Austin with Model Y vehicles. Musk announced last week that some Austin vehicles now run without safety drivers.
Wall Street is watching expansion plans. Morgan Stanley projects 1,000 Tesla robotaxis operating by December.
Wedbush analyst Dan Ives expects robotaxi discussion to dominate the call. He views the safety driver removal as a critical milestone in Tesla’s autonomous vision.
Arizona and Nevada rollout details are expected. Investors want to know fleet size targets and deployment timelines for these new markets.
The Cybercab enters the picture too. Tesla intends to manufacture this dedicated robotaxi vehicle in 2026 for fleet operations.
Software and Robots Drive Future Growth
Full Self-Driving software is going subscription-only at $99 monthly. Musk axed the one-time purchase option.
Tesla removed basic Autopilot features including lane centering and adaptive cruise control. The company is forcing customers toward full FSD subscriptions.
Ives projects FSD penetration could hit 50% or higher. That would dramatically improve Tesla’s financial model and profit margins.
Optimus humanoid robot progress is another key topic. Barclays analyst Dan Levy says the robot has been mostly a prototype until now.
Investors want Optimus v3 capability updates. Production line readiness matters. Manufacturing setting applications need expansion.
Musk claimed this month that Optimus sales could begin next year. His product timeline predictions have a mixed track record though.
Levy outlined the challenge facing Tesla. The company trades at more than 125 times earnings with a market cap above $100 billion. Just one other North American company matches those metrics.
“For the stock to further outperform, Tesla will need to show clear progress on its efforts in Robotaxi, FSD, and Optimus,” Levy wrote Monday.
Futurum’s Shay Boloor called the Q4 results “very ugly.” But weak numbers won’t tank the stock if Musk delivers substance on Tesla’s AI roadmap during Wednesday’s 5:30 p.m. Eastern time call.
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