Tesla has released its fourth-quarter and full-year 2025 earnings, delivering a mixed but ultimately stronger than expected result that highlights improving margins, record energy deployments, and accelerating progress toward its long-term AI ambitions.
For Q4 2025, Tesla reported non-GAAP earnings per share of $0.50, beating Wall Street expectations of $0.44. On a GAAP basis, EPS came in at $0.24, while revenue reached $24.9 billion, topping estimates of $24.5 billion. GAAP net income for the quarter totaled $840 million, reflecting ongoing pressure on profitability compared to prior years, but showing stabilization late in the year.
One of the most notable takeaways from the report was margin improvement, despite softer vehicle sales. Tesla confirmed that, “While automotive sales declined sequentially, gross margin (even when excluding the impact of regulatory credits) improved.” Total GAAP gross margin climbed to 20.1% in Q4, up nearly four percentage points year-over-year, supported by cost reductions, manufacturing efficiencies, and a growing contribution from higher-margin businesses.
Automotive revenue declined 11% year-over-year to $17.7 billion, reflecting lower deliveries and continued pricing pressure. As we previously reported, total vehicle deliveries fell to 418,227 units, down 16% compared to Q4 2024, with Model 3 and Model Y deliveries down 14%. However, Tesla pointed to strength in the Asia-Pacific region, where it achieved record quarterly deliveries, helping to offset weakness in Europe and North America, and in particular Canada where sales dropped by more than 60% in 2025.
Tesla’s Energy Generation and Storage division once again stood out as a key growth driver. Revenue from the segment surged 25% year-over-year to $3.84 billion, while energy storage deployments reached a record 14.2 GWh in Q4 and 46.7 GWh for the full year. Tesla described 2025 as a pivotal year for positioning itself as a supplier of “clean, affordable and rapidly deployable energy capacity” ahead of rising global electricity demand.
For the full year, Tesla generated $14.7 billion in operating cash flow and $6.2 billion in free cash flow, ending 2025 with $44.1 billion in cash and investments, up 21% from the prior year.
Looking ahead, Tesla confirmed plans to ramp six new production lines across vehicles, robots, energy storage, and battery manufacturing in 2026, reinforcing its transition from a traditional automaker to what it increasingly describes as a physical AI company.
After closing the day down 0.10%, Tesla (TSLA) is up nearly 3% in after-hours trading following the release of the report, which you can read in full on Tesla’s website.
