Tesla reported its first annual revenue decline in yesterday’s earnings report.
The EV maker’s profit dropped 46% in 2025, hit by weakening electric vehicle demand and the end of federal subsidies. The company earned $3.8 billion, its lowest profit in years, while vehicle revenue declined 11%. And its annual revenue fell 3% year over year to $94.8 billion.
The company delivered 1.63 million units worldwide, marking a second straight year of falling sales, despite earlier goals of 50% annual growth. The slowdown highlights growing competition and softer global demand for electric vehicles.
Meanwhile, the company announced it would invest $2 billion in Elon Musk’s AI startup, xAI. The company also plans to launch the Tesla Semi, Cybercab, and a new Optimus robot this year.
And, Musk announced Wednesday that Tesla will begin phasing out its Model S and Model X vehicles later this year. Production will end next quarter, though existing owners
will continue receiving support.
Launched in 2012 and 2015, the Model S and Model X helped bring electric cars into the mainstream and played a major role in making Tesla the world’s most valuable automaker.