Tesla (TSLA) reported better-than-expected fourth-quarter profits after the bell Wednesday. The company also said the Optimus robot is on track to begin production at the end of the year.
For the quarter, Tesla reported revenue of $24.9 billion compared to an estimated $25.11 billion, down 2.4% year-over-year. Tesla’s adjusted earnings per share (EPS) was $0.50, compared to the expected $0.45, and operating income was $1.41 billion, compared to the expected $1.32 billion.
Tesla’s fourth-quarter gross margin beat expectations at 20.1%, compared to estimates of 17.1%.
Tesla shares rose more than 3% in after-hours trading, but have since retreated slightly.
“In North America, we continue to ramp up production of the Tesla Semi and CyberCab (both starting in the first half of 2026) and continue preparations for production of the next-generation Roadster,” the company said in its shareholder materials, adding that it will add six new production lines across all products.
Tesla plans to unveil the Optimus V3 in the first quarter of this year, with production expected to begin “by the end of 2026, with an eventual production capacity of 1 million robots per year planned.”
“It’s time to end the Model
Tesla said it has removed a limited number of safety drivers from customer rides for its robotaxi service in Austin, but did not provide a timeline for when everyone would be removed. Regarding new metropolitan areas, Tesla noted that Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas will be targeted for robotaxi service in the first half of 2026.
Tesla said the number of fully self-driving (FSD) subscribers will double in 2025 and is still “seeking regulatory approval in China and Europe.” Tesla reported having 1.1 million FSD subscribers at the end of 2025.
Tesla also announced it will invest $2 billion in preferred stock in xAI, CEO Elon Musk’s AI startup that owns X.com.
Earlier this month, Tesla reported global deliveries of 418,227 vehicles in the fourth quarter, down 15% from 495,570 vehicles delivered in the same period last year.
Tesla delivered 1.64 million vehicles for the year, which was in line with expectations and was down 8% from 2024. This marked the second consecutive year of decline in the company’s annual sales.
Cheaper vehicles like the standard versions of the Model Y and Model 3 couldn’t cushion some of the biggest headwinds. The loss of the federal EV tax credit in the U.S. at the end of the third quarter, competition for new EVs from traditional car brands, and CEO Elon Musk’s polarizing politics all contributed significantly to Tesla’s sales decline.