Tesla’s profit increased by 46% in 2025

Tesla’s profit fell by 46% in 2025 compared to the previous year, when CEO Elon Musk took part in the Trump administration and subsidies for electric cars were killed by Congress, which caused sales to increase.

The electric car company reported on Wednesday that it will post a profit of $3.8 billion in 2025, which is the lowest in years. Total car sales were down 11% year over year, too. Tesla has already revealed that it has shipped 1.63 million cars worldwide in 2025. This marks the second year in a row that its sales have declined, after Musk had promised years of annual growth of 50%.

Investors expected lower sales in Tesla’s fourth quarter and full-year 2025 results, and the company beat Wall Street estimates for earnings and revenue, sending shares into after-market trading on Wednesday. It has been boosted by the strength of its other businesses and industries, including energy and AI, as Tesla continues to attract investors to exit its stalled car business.

The company wrote in a letter to shareholders: “2025 has been a critical year for Tesla as we expand our operations and continue to transform from a hardware-based business to an AI company.”

The company revealed in the letter that it recently invested $2 billion in Elon Musk’s artificial intelligence startup xAI, Elon Musk’s latest venture. Series E funding round.

Revenues from Tesla’s solar and electric businesses also grew 25% compared to 2024, and operating expenses (which include fees for Full Self-Driving software, insurance, parts, and Supercharging) grew 18%. The company also managed to increase its margin compared to the previous quarters.

Long-awaited projects such as the Tesla Semi (first unveiled in 2017) and the Cybercab (debuted in 2024, but teased for years) should enter production in the early years of this year, according to Tesla.

Tesla has more about other projects on his plate, which were detailed in a shared letter. The company has begun production at its lithium refinery in Texas. It is developing new chips in-house for its autonomous and robotics applications. And it plans to unveil the third version of its Optimus robot in the first quarter of this year.

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