Tesla (NASDAQ:TSLA) reported fourth-quarter financials that included the firm's first annual revenue decline on record.
Revenue amounted to $24.9 billion, below market expectations pitched at $25.11 billion, and marking a 3% year-over-year decline. At the same time, adjusted earnings were reported at 50 cents per share, ahead of an analyst forecast consensus of 45 cents.
The EV and automation firm's stock was up 2% in after-hours trading to $437.82, albeit the dominant narrative was about AI and automation rather than money metrics.
Tesla revealed that the car business remained the main drag. Automotive revenue fell 11% to $17.70 billion. Tesla said full-year revenue fell 3% to $94.8 billion, citing lower vehicle deliveries and lower regulatory credit revenue.
Profit dropped sharply. GAAP net income fell 61% to $840 million, or 24 cents per share, as operating expenses rose 39%.
Tesla said some of the higher costs were driven by AI and other R&D projects.
Outside autos, Tesla pointed to growth in energy and services. Energy generation and storage revenue increased 25% to $3.84 billion. Services and other revenue rose 18% to $3.37 billion.
Tesla also disclosed a new tie-up with Musk’s private AI venture, noting an agreement this month to invest about $2 billion dollars in xAI, as part of a financing round. Tesla said the investment and a related framework agreement are intended to enhance its ability to develop and deploy AI products and services “into the physical world at scale.”
On the call, Musk added a product-line surprise, sunsetting its popular early EV brands. “It’s time to basically bring the Model S and X programs to an end with an honorable discharge,” he said.
Also highlighted as Tesla also highlighted parts of its automation play, which includes plans to build Optimus humanoid robots in Fremont, California.
It also said it has been running a Robotaxi-branded ride-hailing pilot in Austin, Texas, and noted it had removed human safety supervisors from a handful of cars for driverless passenger rides. Looking ahead, Tesla said it plans coverage in seven additional US markets in the first half of the year, including Dallas, Houston, Phoenix, Miami, Orlando, Tampa and Las Vegas.
Tesla stock was around 2% higher in after-hours trade, at around $440 per share.