Tesla Profits Fall: Investment Impact | FAZ

Despite the ongoing difficulties, Tesla’s shares have recovered after a period of weakness last spring. The company is currently valued at almost $1.4 trillion on the stock market.

Tesla reported the declining sales figures a few weeks ago. The business results now presented provide a more comprehensive picture of the financial situation. Accordingly, sales fell by three percent to $24.9 billion in the last quarter. In the pure car business, sales even fell by eleven percent. The picture was brightened by growth in the energy sector, which includes battery storage and solar systems.

Net income plunged 61 percent to $840 million last quarter. The loss would be even more dramatic if Tesla did not have its highly profitable emissions points business. It brought in $542 million this time. Tesla receives emissions certificates for the production of electric cars in some regions such as California and can sell them to competitors who this helps meet legal emissions requirements. Full-year net income fell 46 percent to $3.8 billion.

Tesla’s sales figures fell by nine percent last year, after a slight decline in 2024. The company has thus lost its position as the largest manufacturer of electric cars in the world to its Chinese competitor BYD. Tesla had originally promised a return to growth in 2025.

In the fourth quarter, the starting position for Tesla in the American home market was difficult because the previously granted tax credits of up to $7,500 for the purchase of electric cars were abolished at the end of September. But Tesla is also doing poorly in other regions of the world. For example, according to the industry association Acea, the number of new registrations of Tesla vehicles in the EU fell by 32 percent in December and by 38 percent for the year as a whole.

Many observers associate the slowdown with Musk personally, who repeatedly causes controversy with his political positioning. He was at times an advisor to US President Donald Trump and implemented radical cuts in American authorities with the “Doge” working group. This sparked a wave of protests outside Tesla stores.

Apart from that, analysts also blame Tesla’s comparatively outdated product range for the falling sales figures. The last major mass-market product, the Model Y, came nearly six years ago. The Cybertruck pick-up van, which was introduced around two years ago, is selling poorly.

Musk, meanwhile, is trying to divert attention away from the ordinary car business. Instead, he highlights Tesla’s activities around autonomous driving and humanoid robots. But the company is still in its early stages. Last June, it started its first test with robotaxis in Austin, Texas, and there is also a Tesla ride service in the greater San Francisco area. Tesla is also developing the “Cybercab” robotaxi, which has neither a steering wheel nor pedals. The company has now repeated its promise that series production should begin this year.

The humanoid robot Tesla is working on is called “Optimus”. Its production is also scheduled to start before the end of this year. The company now says it wants to one day produce a million copies of the robot a year.

Tesla also announced on Wednesday that it would invest $2 billion in X.AI, the company founded by Musk and specializing in artificial intelligence. A corresponding agreement was signed a few weeks ago. “Tesla builds products and services that bring AI into the physical world,” it said.

The investment is another example of how Musk is trying to intertwine the individual elements of his corporate empire. Last year, X.AI took over the online platform X, which he himself bought in 2022 when it was still called Twitter. According to media reports, Musk’s space company SpaceX has also invested billions in X.AI. SpaceX is currently preparing to go public.