By Chris Isidore, NCS
(NCS) — Tesla CEO Elon Musk, who turned an upstart electrical car maker into an business-altering powerhouse, is pulling the plug on the 2 fashions that helped get him there, as he struggles with one other quarter of declining income and automobile gross sales.
He introduced the top of manufacturing of two fashions – the Model S and Model X, among the many firm’s costliest fashions, on a Wednesday earnings name. Instead, the corporate will use that manufacturing facility house to build humanoid robots as an alternative.
And he appeared to recommend that promoting electrical automobiles, which Tesla helped to introduce to the worldwide mass market, would quickly be an afterthought for the corporate.
Musk predicted the Cybercab, a two-seat self-driving “robotaxi” car with no steering wheel or pedals, will finally be offered in numbers “several times more” than all Tesla’s different automobiles mixed.
But Tesla’s robotaxi service remains to be not in vast operation, utilizing Tesla staff as “safety monitors” within the vehicles whereas different corporations provide true driverless rides in much more cities. Meanwhile, the corporate’s EV gross sales and income, which it nonetheless relies upon upon for the money to fund its formidable autonomous and AI future, proceed to decline.
Tesla mentioned Wednesday that its adjusted revenue fell 16% over the past three months of 2025. Its web revenue tumbled additional, plunging 61% within the quarter and 46% for the 12 months, or a $3.3 billion decline.
The firm posted its largest 12 months-over-12 months gross sales quantity drop ever within the fourth quarter and by far the most important drop in annual gross sales at an organization that directly been rising at almost a 50% tempo.
Tesla’s incomes have fallen in 9 of the final 10 quarters. As of 2025, the corporate’s annual revenue is simply 30% of the $12.6 billion it was in 2022, its peak earnings 12 months.
The model’s fame took a success final 12 months amongst some American and European consumers – backlash to Musk’s political actions and his shut relationship with President Donald Trump. And all US EV sales dropped off later within the 12 months following the elimination of a $7,500 US tax credit for EV consumers.
Tesla additionally faces elevated competitors from different automakers, notably in China, Tesla’s second largest market behind the United States. In reality, Tesla in 2025 misplaced its title of world’s largest electrical car maker to Chinese automaker BYD.
The finish of the Model S and Model X could have a restricted influence on Tesla’s gross sales. Together they make up solely 3% of its world deliveries. Production is due to finish in some unspecified time in the future subsequent quarter.
In its earnings report, the corporate disclosed for the primary time that Tesla reached a deal to make investments $2 billion in xAI. The AI firm, which Musk owns and started in 2023, additionally owns his social media platform, X.
The promise of robotaxis and robots was sufficient to carry the inventory to a document degree in December, though it has retreated considerably since that peak.
Shares of Tesla (TSLA) rose barely in after-hours buying and selling after the corporate mentioned in its earnings assertion that it deliberate to broaden its robotaxi service to seven markets within the first half of this 12 months. That’s on high of the 2 it at the moment serves.
The firm beforehand mentioned that its robotaxi service would serve half of the US inhabitants by the top of 2025. Musk reiterated that aim on Wednesday, saying between 1 / 4 to half of the United States could have totally autonomous automobiles by the top of 2026, “pending regulatory approval.”
The story has been up to date with extra particulars.
The-NCS-Wire
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