Tesla Q4 Net Profit Plummets 61% Year-Over-Year, Invests $2B in Musk’s xAI

Tesla reported its fourth-quarter 2025 financial results, with revenue of $24.901 billion, down 3% year-over-year, and net income of $840 million, a sharp 61% decline compared to the same period last year. For the full year, the company posted total revenue of $94.827 billion—the first annual decline in its history—and net income of $3.794 billion, down 46% year-over-year. Despite the profit slump, Tesla’s quarterly revenue and adjusted earnings per share exceeded market expectations, driving its after-hours share price up by more than 3%. Additionally, Tesla announced it will invest approximately $2 billion in xAI, Elon Musk’s AI company, as part of xAI’s latest funding round.