Electric vehicle-maker Tesla reported a revenue of $24.9 billion, down 3% year-over-year (YoY) in the fourth quarter (Q4) of 2025, compared to 25.7 billion.

The decline was driven primarily by lower vehicle deliveries, partly offset by growth in energy generation and storage, and services revenue.

The automotive revenue declined 11% YoY to $17.7 billion. In contrast, energy generation and storage revenue rose 25% YoY, while services and other revenue increased 18% YoY. This was the result of higher deployments across all regions and continued strength in demand for both Megapack and Powerwall.

The company achieved the highest quarterly energy storage deployments, driven by record Megapack deployments. The total gross profit rose, both sequentially and YoY, to a record $1.1 billion, marking the fifth consecutive record quarter.

The company plans to begin production of Megapack 3 and Megablock at Megafactory Houston in 2026.

Profitability weakened YoY. The net income attributable to common stockholders stood at $800 million, down by 61% YoY in Q4.

The operating income in Q4 2025 was $1.4 billion, down 11% YoY from $1.5 billion in Q4 2024. Net income was negatively impacted by mark-to-market charges on a Bitcoin holding, which depreciated 23% compared to the last quarter, and by unfavorable large intercompany borrowings.Total gross margin improved to 20.1% in Q4 2025 from 16.3% a year earlier, driven by mix, pricing, and energy gross profit. However, operating margin declined YoY to 5.7%, reflecting higher operating expenses and lower scale benefits.

Operating expenses increased 39% to $3.6 billion, up from $2.5 billion in the same period last year. This was mainly driven by higher R&D, including AI-related investments and restructuring charges.

The company’s cash generation remained solid despite lower profits. Operating cash flow was $3.8 billion in Q4, down 21% YoY from $4.8 billion.

Tesla has begun producing battery packs for certain Model Ys with their 4680 cells, unlocking an additional supply vector to help navigate increasingly complex supply chain challenges caused by trade barriers and tariff risks. The company now produces dry electrodes for 4680 cells, with both anode and cathode made in Austin. It expects both the domestic cathode material in Texas and the LFP lines in Nevada to begin production in 2026.

Chief Financial Officer Vaibhav Taneja said, “Q4 2025 was an interesting quarter in a couple of respects. On the autos front, while in Q3, we saw a surge in U.S. demand before the IRA consumer credit cliff, pulling in some demand from Q4. In other parts of the world, we saw an increase in demand, leading to record deliveries in smaller countries like Malaysia, Norway, Poland, Saudi Arabia, and Taiwan. We therefore ended 2025 with a larger backlog than in recent years.”

“As we look to 2026, with the progress that has been made with autonomy, our focus is on ramping production at all our factories. Our biggest global constraint remains the battery pack. While our teams have been creative in trying to resolve the situation by now putting 4680 cells in non-structural packs, we continue to iterate, improving things from here on,” Taneja added.

Full Year 2025

For the full year 2025, Tesla posted a revenue of $94.8 billion, down 3% YoY from $97.6 billion.

Automotive revenue declined 10% to $69.5 billion from $77.07 billion. Energy generation and storage revenue rose 27% YoY to 12.77 billion from $10.08 billion.

The net income attributable to common stockholders fell 46% to $3.8 billion, as against $7.08 billion the previous year.

Full-year operating income declined 38% to $4.4 billion from $7.07 billion a year ago.

For 2025, operating expenses increased to $12.7 billion, up 23% from $10.3 billion.

The company announced that its operating cash flow totaled $14.7 billion in 2025, down 1% YoY.

Tesla reported a total revenue of $28.1 billion for the third quarter of 2025, a 12% YoY increase from $25.1 billion. The company attributed the increase to higher vehicle deliveries and strong growth in its energy business.