Tesla's Q4 2025 Earnings Call: Model S/X Discontinued, Next Robotaxi Locations

Last night, Tesla held its 2025 Q4 Earnings Call, where Tesla discussed their past quarter and talked about what’s coming next. Elon Musk opened up the call by announcing a formal update to Tesla’s mission statement:

Amazing Abundance, in a future that’s marked by universal high income, generated primarily by robots like Optimus, driving down the cost of goods and services.

Musk went on to make a shocking announcement. He said Tesla will stop producing the Model S and Model X next quarter, and the Fremont production lines will be switched to produce Optimus. Although many saw the writing on the wall as the prices of these vehicles kept increasing, and features that were once exclusive to the S/X line have now trickled down to the Model 3 and Model Y.

While the financials showed a slight revenue dip as the company transitions between waves, the 2026 roadmap is arguably the most aggressive in Tesla’s already fast-moving history.

If you happened to miss the call or want to catch up with everything Tesla announced, including all the questions and answers during the Q&A session, we’ve got you covered right here, as usual.

FSD & Robotaxi

• Elon confirmed that fully driverless Robotaxis (no human inside and no chase car) officially began operating in Austin as of yesterday (January 27, 2026).

  • He also confirmed that there is no use of chase cars or anything similar

  • The first driverless Robotaxi rides are randomly selected from regular paid rides

  • Tesla is still being cautious in the rollout to prevent incidents or accidents

  • Autonomy will increase gradually month-to-month

  • Tesla noted that the revenue and cost per mile metrics are not meaningful enough for discussion this quarter

• Opportunity to add or remove your car from the Robotaxi Fleet

  • Cars with AI4 will be able to do this

  • Will provide an opportunity for customers to earn money or pay their lease/loan costs

• Tesla intends to have autonomous vehicles in somewhere between a quarter to half of the United States, pending regulatory approval

  • This compares to last year's statements, where Robotaxis would be ubiquitous across the US by the end of 2026

  • Tesla is being more cautious with their wording here, partly due to regulatory rollouts or weather conditions

  • For now, Tesla is working on a city-by-city/state-by-state basis due to the lack of overarching federal regulation

  • Tesla announced the next cities that will get to experience the Robotaxi network

• Tesla provided FSD subscription numbers for the first time

  • 1.1 million active FSD vehicles

  • 70% of these are purchases (770,000)

  • 30% of these are month-to-month subscriptions

  • Approximately $32,670,000 in monthly recurrent revenue

Tesla AI Chips

• Tesla intends to build a Terafab in the US to integrate logic, memory, and packaging

  • This will mitigate future supply bottlenecks and geopolitical risks with importing chip parts, and vertically integrate the supply chain

  • Elon noted he’s working personally on AI5 design still, which is planned for volume production in 2027

• AI5 targets a 50x performance improvement over the current AI4 chip

  • 10X raw compute and 9x memory capacity

• Tesla is building Cortex 2 in Texas.

  • The plan is to more than double the on-site H100-equivalent compute capacity in the first half of 2026

Optimus

• Optimus 3 to be unveiled in a few months

  • This will also be the first showcase of the updated hand design that Tesla has been working on

• The dedicated production line in Fremont will use the space being vacated by the Model S and Model X lines

  • Volume production is expected to begin before the end of 2026

  • This is a new supply chain with new parts, and it will be a longer and slower manufacturing S-curve, as every part is new

  • The eventual capacity for the Fremont line is 1 million robots per year

• Elon reiterated that Optimus will be a general-purpose robot

  • Demonstrate, show it, or describe a task, and they will be able to do the task

  • Primary driver of Amazing Abundance

  • Significant driver of US GDP

Battery, Powertrain, & Manufacturing

• Tesla confirmed it will wind down production of the Model S and Model X next quarter.

  • This is to increase factory floor space in Fremont to support the construction of the Optimus production lines.

  • Tesla’s future is based on autonomy, not manually driven cars

  • For buyers, Tesla will continue to support the S and X programs for the foreseeable future

• Tesla’s rollout of the refreshed Model Y with the bigger screen is now complete across all its markets

  • Other variants, like the Model Y L, were not mentioned in the deck or call

• Cybercab production lines are being installed at Giga Texas

  • Volume production is scheduled to begin 1H 2026

  • Cybercab is being designed for a 50-to-60-hour per week duty cycle

  • The typical car sees a 10-hour per week duty cycle

• Tesla Semi is beginning production ramp throughout 1H 2026

  • New Megachargers are being deployed across the United States to support Semi rollout along major freight corridors alongside partners like FlyingJ

• The Roadster remains in “Design Development”, even with a second unveiling date of April 1st, 2026

• Tesla intends to eventually transition the Cybertruck production line to a fully autonomous variant with no controls, but little other changes

  • This will be focused on cargo delivery and logistics, rather than an adventurous do-everything pickup truck

• Tesla is now producing dry-electrode 4680 cells with both anode and cathode made in Austin

  • Tesla is beginning to roll out a new iteration of the 4680 Model Y using the new cells

Tesla Energy

• Tesla Energy continues to be one of the fastest-growing business segments

  • Tesla deployed a record 14.2 GWh in Q4 alone (up 29% YoY)

• More manufacturing capacity is being built out

• Tesla is still looking to add solar and batteries on Earth and solar in space for AI datacenters

  • This means vertically integrating a solar supply chain from raw materials to the end product

  • Tesla is aiming for 100GW/year of solar cells manufactured in the United States

• Tesla confirmed that Megafactory Houston’s construction is going well

  • Mega Houston will produce Megapack 3 and Megablock starting in 2026

• Tesla’s Lithium Refinery in Texas has commenced pilot production

• The Tesla Powerwall Network supported over 89,000 Virtual Powerplant Events in 2025

  • This saved homeowners over $1 billion in electricity bills

Financials

• Tesla reported $24.9 billion in total revenue for Q4 2025 (a 3% YoY decrease)

• GAAP Net Income was $0.8 billion, while Non-GAAP Net Income was $1.8 billion for Q4

• Operating cash flow was $3.8B, with Free Cash Flow at $1.4B for Q4

• Automotive Revenue was $69.5B, down 10% YoY

  • Tesla saw increased demand in smaller markets, while there was a demand pull-back in the United States due to the end of the Federal EV Tax Credit

• Energy Revenue was $12.8B, up 27% YoY

• Tesla ended the year with a record $44.1 billion in cash and investments

  • This pile increased by $7.5 billion throughout 2025

  • Tesla’s bitcoin holdings were marked down 23% in Q4

• Tesla’s CFO, Vaibhav Taneja, warned that 2026 will be a CapEx-heavy year

  • $20 billion in capital expenditures are planned

• Funding six concurrent factory ramps

  • Lithium Refining

  • LFP Batteries

  • Cybercab

  • Semi

  • Megafactory Houston

  • Optimus

• Tesla is sunsetting FSD’s one-time purchase and moving to a subscription model

Forward-Looking Outlook

• Tesla’s CFO called this upcoming year “a new book” for the company as it pivots to AI and robotics

• Tesla has entered an agreement to invest approximately $2 billion in xAI to acquire Series E Preferred Stock

  • This partnership aims to closely integrate Grok into Tesla’s products

  • Grok will be the “orchestra conductor” that manages fleets of autonomous cars and robots

• Tesla continues to be constrained with battery pack production

Investor Q&A

Today there are ~90M cars sold globally each year, does Tesla have a view based on its robotaxi ambition what this number will be in 5 or 10 years and how does this impact Tesla's EV strategy to have more models?

• The future is autonomous

• General transportation will be better served by autonomy

• 90% of vehicle miles are done with 1-2 people in the vehicle, making it an excellent target for Cybercab

• Cybercab will not ship with steering wheels or pedals; it will either drive itself or not drive

• Tesla intends to produce more Cybercabs than all of the rest of their vehicles combined

Are there still plans to launch new models to address different price segments and vehicle types which could materially expand the TAM for Tesla?

• Tesla has launched their least expensive models recently

• Tesla will continue to bring down the cost of vehicles without sacrificing range or premium feel

• Tesla is not looking to develop further models, based on their focus on the Cybercab

Historically Tesla has spoken about Gross margin per model, are there standalone Gross Margin targets for the current models excluding the benefits of FSD sales?

• Can’t apply the cars sales model to software

• Autonomy software will continue to grow and be the driver of Tesla’s growth

• Cybercab is designed around a 50-60-hour per week duty cycle compared to the 10-hour per week duty cycle of the average car

• Only vehicles Tesla intends to design going forward will be autonomous vehicles, with the exception of the Roadster

  • Roadster's debut in April is mentioned again

You once said: Loyalty deserves loyalty. Will long term Tesla shareholders still be prioritized if SpaceX does an IPO?

• Skipped. Tesla does not answer non-Tesla-related questions at a Tesla Earnings Call

What is the current bottleneck to increased Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?

• Tesla is working on learning scaling problems

  • That means learning from safety monitors on the ground

  • Long tail of the edge-case issues to solve

  • Tesla has been churning through them recently with minor FSD updates and builds

  • Unsupervised is now on the ground and deployed in Austin

  • Fleet size in Austin will scale just like the fleet in Bay Area

  • One noted item is charging constraints and service constraints

• V14 is a variant of the Robotaxi software

  • Updates and upgrades from the Robotaxi build will filter down to FSD for consumers

After the unveiling of the Cybertruck, Musk stated that if it didn’t sell well, Tesla would build a more conventional-looking pickup. How practical would it be to create this new design on the Cybertruck architecture and could it be conveniently built on the existing production lines?

• Cybertruck continues to be a leader in the electric pickup segment

• Cybertruck line will transition to fully autonomous

  • Focus will be on deliveries and logistics

Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?

• Still in R&D phases for Optimus

• Some basic tasks being performed in the factory

  • Old versions are being depreciated

  • Factory usage is for learning, not for actual production

• Optimus Gen 3 will be a big jump for capabilities, especially in the factory

• Tesla expects to increase its headcount at Fremont even with the closure of the Model S/X line

When is FSD going to be 100% unsupervised?

• There are fully unsupervised vehicles in Austin now

• Tesla is being cautious with the rollout, still, for safety

• Edge cases and challenging intersections are something they’re watching for

  • Humans are having lots of accidents in these places, so FSD must be able to handle them safely

• Tesla will reduce the amount of driver monitoring with each successive release as safety increases

What has surprised you about the robotaxi rollout so far, and what factors have constrained fleet expansion to date, which appears to be ~200 vehicles based on public tracking?

• Not many surprises, Tesla has all the metrics

• Approximately 500 vehicles between Austin and Bay Area at this point

  • Varying amount based on peak and off-peak times

• Tesla is deliberately slow with this

  • All the supporting infrastructure is already in place, just have to take it slow

Are chase cars part of the initial driverless rollout? If yes, what milestones are required to remove them, and what additional value do they provide beyond a safety monitor?

• Skip

Elon has been spending significant personal time on Tesla’s chip design. What was the forcing function behind this increased involvement, and do you think external chip sales will represent a significant portion of Tesla's valuation by the end of the decade?

• Elon spends time on the most significant issues facing his companies

• Every Tuesday and Saturday, focused on AI5

• AI5 will be a big leap, and AI6 will be even better

• No plans to sell outside of Tesla until they have enough chips for vehicles, Optimus, and their own data centers

• Elon confirms the intent to build a Terafab in the US to consolidate and vertically integrate chip production

Call-in Questions

$20 Billion CapEx Increase, where is this going? Is this one-off or should we expect more?

• Six new factories, a new data center, scaling Optimus and Robotaxi fleets, increasing training and compute speeds

• Doesn’t factor in solar fab or chip fab

• We should expect more large CapEx expenditures like this

xAI Investment Leverage

• Furtherance of Master Plan IV, deploying AI to physical bodies

• Tesla could do it themselves, but there are lots of things xAI can do to help

Memory Constraints

• Tesla AI is very compute-efficient and very memory-efficient

• Tesla’s focus is on increasing intelligence per gigabyte, intelligence density

• Order of magnitude better in density than Grok

• Terafab will help remove supply constraints on memory as well

China Optimus Competition?

• Yes, China’s AI and humanoid robots are competitive

• No significant competitors outside of China

Listen to Replay

If you’d like to listen to the entire earnings call, you can do so below.