Tesla posted a 46 percent fall in 2025 net profit to $3.8 billion from a year earlier. EV sales also fell for a second straight year after Chief Executive Elon Musk joined the Donald Trump administration, TechCrunch reported on Jan. 28 (local time).

Sales plunged after federal EV subsidies were halted.

Tesla shipped 1.63 million vehicles in 2025, and revenue fell 11 percent from a year earlier. Musk set a target of 50 percent average annual growth, but the company has been in decline for two straight years, deepening investor concerns, TechCrunch reported.

Tesla has emphasised a shift toward becoming an AI-focused company rather than an automaker. Musk said in a shareholder letter, "2025 was an important year in the transition from hardware-centric to a physical AI company," and disclosed that it invested $2 billion in xAI, an AI startup founded by Musk.

Not all of Tesla's businesses are struggling. Revenue from its solar and energy storage business rose 25 percent from a year earlier, while service revenue including Full Self-Driving (FSD) software, insurance, parts and Superchargers increased 18 percent. In particular, Tesla improved gross margin from the previous quarter and partially recovered profitability, TechCrunch reported.