Tesla's revenue and profits fell sharply in the fourth quarter, capping the electric vehicle maker's toughest year since turning profitable six years ago. Tesla said Wednesday that adjusted revenue fell 16% in the final three months of 2025. Net profit fell even steeper, plunging 61% in the quarter and 46% for the full year, a decline of $3.3 billion. The drop wasn't a surprise — the company posted the biggest annual decline in sales volume in its history in the fourth quarter. Tesla's earnings have fallen in nine of the past ten quarters. In 2025, the company's annual revenue represents only 30% of the $12.6 billion recorded in 2022, the year of peak profitability. The financial troubles mark a sea change for what was once the world's fastest-growing and most profitable automaker, the company that was instrumental in bringing electric vehicles to the mass market. But amid declining electric vehicle sales, CEO Elon Musk and his Wall Street backers have increasingly focused on his ambitious plans for autonomous «robotaxis» and humanoid robots, which have yet to deliver on their promises. Tesla's global electric vehicle sales fell in the quarter, despite the fact that the global EV market continued to grow. The brand's reputation suffered last year among some American and European buyers amid negative reactions to Musk's political activities. In addition, US electric vehicle sales fell toward the end of the year following the elimination of a $7,500 tax credit for EV buyers. Tesla also faces increasing competition from other automakers, particularly in China, the company's second-largest market after the United States. Incidentally, in 2025, Tesla lost the title of the largest manufacturer of electric vehicles in the world in favor of the Chinese manufacturer BYD.
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