Tesla has reported its first annual fall in revenue as the electric carmaker accelerates a strategic shift away from legacy vehicle models and towards artificial intelligence and robotics.
The company said total revenues fell 3 per cent in 2025, marking the first year-on-year decline in its history, while profits plunged 61 per cent in the final three months of the year. Tesla also confirmed it will end production of its Model S and Model X, two of its longest-running vehicles.
Manufacturing capacity at the California plant previously used for those models will be redirected towards Tesla’s humanoid robot programme, known as Optimus, underscoring the company’s push into robotics as a future growth engine.
The announcement comes as competition in the electric vehicle market intensifies. In January, China’s BYD overtook Tesla as the world’s largest EV maker by sales, while analysts have warned that Tesla’s vehicle line-up has begun to look dated.
Tesla also disclosed a $2bn (£1.45bn) investment in xAI, the AI venture founded by chief executive Elon Musk. Musk said the move reflected pressure from shareholders to back the company.
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