Tesla reports Q4 adjusted EPS of 50 cents and revenue of $24.90 billion

Tesla pulled off a narrow beat in the fourth quarter, reporting adjusted earnings of 50 cents per share, just ahead of the 45 cents analysts expected, and $24.90 billion in revenue, slightly above the $24.79 billion forecast.

That small win was enough to send the stock up 4% in after-hours trading. But behind the headline was a packed report; one with production totals, spending changes by Elon Musk, and another big AI move.

The company said it produced 434,358 vehicles and delivered 418,227 during the quarter. The Model 3 and Y lineup made up most of that with 422,652 produced and 406,585 delivered, while other models like the Cybertruck and S/X added 11,706 produced and 11,642 delivered.

Around 3% to 5% of those vehicles were counted under lease accounting. For all of 2025, Tesla made 1,654,667 vehicles and delivered 1,636,129, keeping output steady even as pricing pressures stuck around.

Tesla reports record energy deployments and tight margins

Energy storage was the big standout. Tesla deployed 14.2 GWh of energy storage in Q4, literally making its biggest quarter ever. That brought the total 2025 deployments to 46.7 GWh, driven by growing demand for Powerwall and Megapack.

Energy generation and storage revenue hit $3.84 billion, a 25% increase year over year. That growth helped cushion the drop in automotive revenue, which fell 11% from Q4 2024 to $17.69 billion.

Service and other revenue rose to $3.37 billion, up 18%. Overall, total revenue for Q4 came in at $24.901 billion, down 3% from the same time last year. Gross profit was $5.01 billion, up 20%, with a gross margin of 20.1%, a bump of 386 basis points year over year. Still, operating expenses jumped 39% to $3.6 billion, putting a dent in profits.

Income from operations was $1.409 billion, an 11% decline, while operating margin slipped to 5.7%, down 50 basis points from a year ago. Adjusted EBITDA came in at $4.154 billion, slightly lower than the $4.333 billion posted in Q4 2024, with a 16.7% EBITDA margin. Free cash flow dropped 30% to $1.42 billion, while net cash from operations sank 21% to $3.81 billion.

Net income using GAAP was $840 million, a sharp 61% drop year over year. Non-GAAP net income came in at $1.76 billion, down 16%. GAAP earnings per share was 24 cents, while non-GAAP EPS stayed at 50 cents, flat from the prior quarter.

The company said none of its $1 billion Bitcoin was sold during the quarter. As noted, adjusted EBITDA now excludes gains or losses from digital assets, a change made starting in Q1 2025.

Tesla confirms $2B xAI investment and updates battery plans

The company also said it will invest $2 billion to purchase Series E preferred shares in xAI, part of a broader tech partnership. While shareholders had already approved a nonbinding plan to work with xAI, this is the first time Tesla has confirmed a financial commitment.

The two companies also signed a framework deal to work together on artificial intelligence, which falls under Tesla’s “Master Plan Part IV.”The plan includes exploring how AI tools from xAI could be used in Tesla’s physical products.

“Together, the investment and the related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services into the physical world at scale,” Elon said. The investment is expected to close in Q1 2026, pending regulatory approvals.

On the battery side, Tesla reported progress in localizing key parts of the supply chain. “We now produce dry-electrode for 4680 cells with both anode and cathode made in Austin,” the company said. It also said production of cathode material in Texas and LFP battery lines in Nevada is expected to begin sometime in 2026.

Tesla ended the quarter with $44.06 billion in cash and investments, up from $36.56 billion a year ago. Capital expenditures totaled $2.393 billion, roughly flat from Q3. That number is expected to stay high in 2026, as spending on factories, AI training compute, and new battery capacity ramps up.

There was no mention of new models or delivery guidance for 2026 in the earnings release. But the company said thank you to its “customers, employees, suppliers, shareholders, and supporters” for helping reach the results.

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