Shares of Tesla Inc. rose slightly in after-hours trading today after the company beat expectations in its fiscal fourth quarter and Chief Executive Officer Elon Musk announced major changes that will shift Tesla’s identity beyond car manufacturing.

For the quarter that ended on Dec. 31, Tesla reported adjusted earnings per share of 50 cents, down from 73 cents per share in the same quarter of 2024, on revenue of $24.9 billion, down 3% year-over-year. Both figures came in ahead of the 45 cents per share and revenue of $24.78 billion expected by analysts.

Net income for the quarter came in at $840 million, driven in part by stronger-than-expected margins and record energy storage deployments. Vehicle deliveries in the quarter passed 418,000 units but were lower than the same quarter of 2024 and below investor forecasts.

For the full year, Tesla reported $94.8 billion in revenue, marking the first annual decline in the company’s history. Profits also fell from 2024 due to weaker vehicle sales in markets such as Europe and China, where competitive pressures have intensified.

But car sales numbers were not the main area investors were interested in, as Elon Musk laid out on Tesla’s investor call the company’s strategic roadmap, and it was focused on robots. Musk and Tesla executives said on the call that Tesla is accelerating the company’s transformation from a traditional electric car maker into a “physical AI company.”

The shift toward robotics is starting with a restructuring of the company’s product lineup. Musk announced that Tesla is ending production of its long-running Model S and Model X vehicles.

Tesla plans to use freed-up capacity at its Fremont factory to build Optimus humanoid robots and future autonomous vehicles, effectively repositioning Fremont as a robotics and autonomous vehicle hub.

The third-generation Optimus robot is expected to be showcased in the coming months, as Tesla targets the start of production before the end of 2026 and mass-market sales projected for 2027.

Alongside its shift to robots, it was also announced that Tesla would invest $2 billion into xAI Inc., Musk’s artificial intelligence company, and tighten integration between Tesla’s AI systems and its physical products.

On the call, Musk did not shy away from acknowledging near-term headwinds, including margin pressures, supply chain risks and softer EV demand in some regions.

Tesla also forecasts significant capital expenditures in 2026 — more than $20 billion — to build out manufacturing capacity, AI compute infrastructure and robotics facilities.

Though Tesla may be shifting much of its focus to robots, it’s not abandoning vehicles altogether. It will still move forward with the Tesla Semi and the Cybercab, which are both expected to go into production in the first half of this year, along with the production of a next-generation Roadster.

Photo: Tesla/X