Tesla revenue beats estimates despite weaker vehicle deliveries
The company’s vehicle business has been under strain as rivals roll out newer models, often at lower prices
[SAN FRANCISCO] Tesla beat Wall Street estimates for fourth-quarter revenue on Wednesday (Jan 28) despite the Elon Musk-led automaker delivering fewer-than-expected vehicles in the holiday quarter.
The Austin, Texas-based company reported revenue of US$24.9 billion for the three months ended Dec 31, compared with analysts’ average estimate of US$24.79 billion, according to data compiled by LSEG.
Tesla also said that it had entered into an agreement to invest about US$2 billion in Musk’s xAI startup.
Wall Street expects the company to deliver 1.8 million units in 2026, representing an 8.2 per cent increase, according to Visible Alpha data. Tesla’s vehicle business has been under strain as rivals roll out newer models, often at lower prices. A US tax incentive for electric vehicle has also ended, and Musk’s far-right political rhetoric have alienated some customers.
Investors have increasingly focused on Musk’s push into self-driving technology and robotics, with many looking for proof points that the autonomy story is moving from promise to product.
Tesla has leaned on lower-priced “Standard” versions of its best-selling Model 3 and Model Y to attract more price-sensitive buyers, a strategy analysts expect will play a key role in 2026 deliveries growth even if it pressures margins.
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Some analysts view it as a deliberate trade-off to expand the vehicle fleet that can later generate higher-margin revenue from software.
Its energy generation and storage business has proven to be a notable bright spot. Tesla said that its energy-storage deployments rose about 29 per cent to a record 14.2 gigawatt-hours in the fourth quarter, benefiting from sustained demand for grid-scale batteries used to support renewable power and stabilise electricity networks.
Investors have been looking for signs that the Full Self-Driving (FSD) and robotaxi rollouts are advancing, including updates on regulatory progress and clearer timelines for the purpose-built Cybercab, which is designed without a steering wheel or pedals.
Musk has repeatedly set ambitious timelines for robotaxis, saying they would reach half of the US population by the end of 2025, before later narrowing that goal to deployment in the top eight to 10 metropolitan areas. The company has since missed those targets and provided no updated timelines.
He has continued to predict rapid progress for Full Self-Driving, a vision he has outlined for nearly a decade, but has not provided firm dates for regulatory approval or broad unsupervised deployment. Musk said last year that Tesla aimed to begin production of its purpose-built Cybercab in April 2026, describing it as a fully autonomous vehicle without a steering wheel or pedals.
Cybercabs will be added to its robotaxi service that currently relies on Model Y vehicles running a version of Full Self-Driving and will also be available for consumers to buy.
Last week, he said initial production of the Cybercab robotaxi and the humanoid robot Optimus would be “agonisingly slow” before accelerating over time, leaving investors still waiting for a more detailed timeline and production forecast.
Tesla’s shares rose about 11 per cent in 2025, their slowest annual gain in three years, yet the company, at about US$1.5 trillion, remains the world’s most valuable automaker by a wide margin. REUTERS
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