/ February 4, 2026 Tesla’s latest quarterly earnings report delivered a beat on profitability, yet it was the company’s strategic announcement that truly captured Wall Street’s attention. The electric vehicle pioneer is decisively shifting its focus, placing robotics and autonomous driving at the core of its future, a move that is polarizing market participants who question whether this represents visionary foresight or a costly transformation. Profitability Strength Meets Revenue and Delivery Softness For Q4 2025, Tesla reported a non-GAAP earnings per share of $0.50, surpassing the consensus estimate of $0.45. However, the market’s muted reaction stemmed from other figures in the investor relations release. Quarterly revenue declined by 3% year-over-year to $24.9 billion. Operational metrics presented a mixed picture. The company’s gross margin expanded to 20.1%, reaching its highest point in two years. Conversely, vehicle deliveries of 418,227 units fell short of the analyst consensus of 422,850 that Tesla itself compiles. This isn’t a collapse, but it signals that the automaker’s growth trajectory and demand are no longer as assured as in prior years. Adding to the concerns, 2025 marked Tesla’s first year of annual revenue decline, with figures around $94.8 billion. Furthermore, the company ceded its title as the world’s largest EV manufacturer to BYD, which sold 2.26 million electric vehicles in 2025. Phasing Out Legacy Models to Make Room for Optimus The strategic redirection was underscored during the earnings call. Tesla plans to cease production of its Model S and Model X by mid-2026. These two models accounted for less than 3% of total deliveries in 2025. The freed-up capacity at the Fremont factory will be repurposed for manufacturing the humanoid Optimus robot. The “other models” category, which includes the S and X, saw deliveries plummet by 40.2% compared to the previous year. This decline justifies the company’s decision to streamline its portfolio and reallocate capital and production space toward its future-oriented projects. Massive Capex Plans and a Divided Analyst Community In parallel, Tesla announced capital expenditures exceeding $20 billion for 2026. These funds are earmarked for artificial intelligence, robotics, and semiconductor infrastructure. The company is targeting an annual production run rate of 1 million Optimus robots and aims to expand its autonomous driving services.