Tesla (TSLA) Stock: Q4 Earnings Expected to Drop as EV Deliveries Fall 15%

TLDR

• Tesla reports Q4 earnings after market close Wednesday with analysts expecting 43 cents per share on $24.6 billion revenue, down from 73 cents per share on $25.7 billion last year
• Vehicle deliveries dropped 15% to 418,227 units in Q4 as customers bought before the $7,500 federal EV tax credit ended in September
• Operating profit margins expected below 5%, pressured by falling regulatory credit sales after Trump administration policy changes
• Investors focused on robotaxi expansion beyond Austin, Full Self-Driving subscription shift from one-time purchase, and Optimus humanoid robot development timeline
• Tesla removed safety drivers from some Austin robotaxis last week, with analysts expecting updates on rollouts to Arizona and Nevada

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Tesla releases its fourth quarter earnings Wednesday after market close. The numbers won’t look pretty.

Tesla, Inc., TSLA

Wall Street expects earnings per share of 43 cents on revenue of $24.6 billion. That’s down from 73 cents per share and $25.7 billion in the same quarter last year.

The EV business took a beating in Q4. Tesla delivered only 418,227 vehicles, a 15% drop from 495,570 units a year earlier.

The full year wasn’t much better. Tesla delivered 1.64 million vehicles in 2025, marking the second straight year of declining annual sales.

Several factors hurt sales. The $7,500 federal EV tax credit expired in September, causing a rush of purchases in Q3 that left Q4 depleted. New competition from legacy automakers ate into market share.

CEO Elon Musk’s political activities also played a role. His polarizing presence may have turned off some potential buyers.

Operating margins tell the same story. Analysts expect margins below 5%, down more than a percentage point from last year.

Regulatory credit sales are falling too. Tesla makes money selling zero-emission vehicle credits to other automakers. The Trump administration’s policy changes reduced demand for these credits.

One bright spot exists in the energy business. Tesla deployed a record 14.2 gigawatt hours of battery storage products in Q4. That’s up from 11 gigawatt hours last year.

The Robotaxi Question

Investors care less about car sales these days. They want to hear about robotaxis during the earnings call at 5:30 p.m. Eastern time.

Tesla launched driverless cab service in Austin, Texas using Model Y vehicles. Last week, Musk announced the company removed safety drivers from some Austin vehicles.

Morgan Stanley predicts 1,000 Tesla robotaxis on the road by year end. Investors want details on expansion to Arizona and Nevada.

The Cybercab matters too. Tesla plans to produce this purpose-built robotaxi in 2026 for its fleet operations.

Full Self-Driving software is changing too. Musk announced the end of the one-time purchase option. Now customers must subscribe at $99 per month.

Tesla also removed its basic Autopilot features. Lane centering and adaptive cruise control are gone. The company wants to push customers toward the full FSD subscription.

Ives believes FSD penetration could reach 50% or higher. That would change Tesla’s financial model and margins going forward.

Optimus Takes Shape

The Optimus humanoid robot represents another future revenue stream. Musk once said these robots would work in Tesla factories soon.

Barclays analyst Dan Levy says Optimus has been mostly a prototype until now. Real manufacturing progress could drive excitement.

Levy wants to know about Optimus v3 capabilities. He’s watching for production line readiness and expanded manufacturing abilities.

Musk said this month he sees Optimus sales starting next year. The CEO has a history of optimistic timelines though.

Levy laid out the stakes clearly. Tesla trades at over 125 times earnings with a market cap above $100 billion. Only one other North American company has that combination.

The numbers matter less than the vision right now. Shay Boloor from Futurum called the upcoming results “very ugly.”

But investors will look past ugly earnings if Musk delivers concrete updates on the company’s AI-driven future. The earnings call starts at 5:30 p.m. Eastern time Wednesday.

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