Tesla beats on EPS and revenue, says it has invested $2 billion into xAI
Tesla reported Full Self-Driving subscription numbers and a list of cities where it says Robotaxi is expanding in the first half of 2026.
Tesla said its fourth-quarter earnings and revenue topped analysts’ expectations, though the company also cemented its first-ever drop in annual revenue.
For the quarter, the company’s non-GAAP earnings per share came in at $0.50, versus analysts’ expectation of $0.45. Revenue was $24.9 billion, compared with Wall Street’s call of $24.7 billion.
Tesla also said it had invested $2 billion into CEO Elon Musk’s xAI. Late last year, Tesla shareholders had voted to invest in xAI, but the board didn’t approve the measure since there were many abstentions.
“Tesla is building products and services that bring AI into the physical world,” Tesla wrote in a press release. “Meanwhile, xAI is developing leading digital AI products and services, such as its large language model (Grok).”
Shares were up 4.4% in recent after-hours trading.
Tesla’s earnings report comes after the company posted disappointing delivery numbers earlier this month. Its EPS and revenue, while both beats, are also declines from the same quarter a year earlier (when EPS was $0.73 and revenue was $25.7 billion).
Tesla’s full-year revenue came in at $94.8 billion, compared with 2024’s $97.7 billion. Analysts had forecast $94.9 billion.
The company reported a gross margin of 14.8%, above the 14.4% analyst consensus estimate and above last year’s numbers, even amid the loss of regulatory credits and a wave of discounting.
For the first time, Tesla released the number of Full Self-Driving subscriptions, saying it had 1.1 million active subs, up from 0.8 million in the same quarter last year. That’s just above 12% of cumulative Tesla deliveries, similar to what Tesla disclosed last year. Tesla will have to reach 10 million active FSD subscriptions, among other milestones, in order for Musk to receive his $1 trillion pay package.
Tesla also disclosed a list of cities where it expects to roll out Robotaxis in the first half of this year, including several cities in Texas and Florida.
On the analyst call Wednesday, investors will likely be looking for more details on the company’s forthcoming projects, on which it’s staked its future. That includes timing for fully removing safety drivers from Robotaxis, Cybercab, and Optimus robot production and the development of its AI chips. They’ll also be looking for just how much Tesla’s AI ambitions will cost, after the company noted last quarter that capital expenditure would “increase substantially in 2026.”
