Tesla shares rise after surpassing Q4 earnings expectations, Optimus robots scheduled for production by year-end

Tesla Surpasses Q4 Earnings Projections and Advances Robotics Initiatives

Tesla (TSLA) exceeded Wall Street’s expectations in its fourth-quarter earnings report released Wednesday evening. The company also confirmed that production of its Optimus robots is scheduled to begin by the end of the year.

Financial Highlights

• Revenue for the quarter reached $24.90 billion, slightly below the anticipated $25.11 billion and representing a 2.4% decrease year-over-year.
• Adjusted earnings per share (EPS) came in at $0.50, outpacing the forecasted $0.45.
• Operating income totaled $1.41 billion, surpassing the estimated $1.32 billion.
• Gross margin for Q4 stood at 20.1%, notably higher than the expected 17.1%.

Following the report, Tesla shares climbed more than 3% in after-hours trading.

Production and Product Updates

According to Tesla’s shareholder update, preparations are underway in North America to ramp up production of the Tesla Semi and Cybercab, both set to begin in the first half of 2026, alongside the next-generation Roadster. The company also plans to expand with six new production lines across its product range.

The unveiling of Optimus V3 is slated for the first quarter of this year, with mass production targeted before the end of 2026 and a goal of manufacturing up to one million robots annually.

Robotaxi and FSD Developments

Tesla has begun limited removal of safety drivers from its robotaxi rides in Austin, though it has not specified when this will be expanded or provided details on future robotaxi deployments. The company also reported that subscriptions for its Full Self-Driving (FSD) software doubled in 2025, and it continues to seek regulatory approval in both China and Europe.

Additionally, Tesla announced a $2 billion investment in preferred shares of xAI, the artificial intelligence venture led by CEO Elon Musk, which owns X.com.

A driverless Tesla robotaxi navigates through Austin, Texas, on June 22, 2025. (AP Photo/Eric Gay)

Challenges in the EV Market

Tesla’s core electric vehicle business has faced headwinds, reflected in declining sales and profits. In early January, the company reported global deliveries of 418,227 vehicles for Q4, a 15% drop from the 495,570 units delivered during the same period the previous year.

For the entire year, Tesla delivered 1.64 million vehicles, matching expectations but marking an 8% decrease from 2024. This was the second consecutive year of falling annual sales for the automaker.

Lower-priced models like the standard Model Y and Model 3 were not enough to offset several significant challenges, including the expiration of the federal EV tax credit in the US at the end of Q3, increased competition from established automakers, and the impact of CEO Elon Musk’s controversial public statements.

Investor Outlook and Future Growth Drivers

With traditional EV sales under pressure, investors are increasingly looking to Tesla’s innovations—such as its FSD software, robotaxi service, and the Optimus robot—as potential growth engines for the company’s stock.

“The main topic on the upcoming conference call will be the rollout of the Robotaxi service across the US, including the removal of safety drivers from the fleet. The market is at a pivotal point, as opinions are divided on how rapidly the Robotaxi era will unfold in the coming year,” commented Wedbush analyst Dan Ives.

Elon Musk, CEO of SpaceX and Tesla, attends the World Economic Forum in Davos on January 22. (Fabrice COFFRINI / AFP via Getty Images)

Additional Updates

• Last week, Musk revealed that Tesla had begun operating some vehicles in Austin without safety drivers, a move described by Dan Ives as a significant milestone toward the company’s long-term Robotaxi ambitions.
• There are ongoing discussions about expanding robotaxi operations to new markets like Arizona and Nevada, with Morgan Stanley projecting up to 1,000 Tesla robotaxis on the road by year’s end.
• Tesla is transitioning from a one-time FSD purchase fee to a subscription model, currently priced at $99 per month, and has removed certain Autopilot features to encourage FSD adoption.
• Musk has indicated that sales of the Optimus robot could begin next year, though he is known for setting ambitious timelines.