Tesla's First Ever Annual Revenue Drop Is Not The Concerning Part - CleanTechnica

Tesla reported its first-ever annual revenue decline, with total revenue dropping 3% from $97.7 billion in 2024 to $94.8 billion in 2025. Vehicle revenue fell more sharply by 11% in Q4 2025 compared to the previous year, alongside a 16% drop in vehicle deliveries in the same quarter and an 8.6% decline for the full year. Despite these sales decreases, operating expenses surged 39% in Q4 2025, leading to an 11% drop in operating income and a dramatic 61% plunge in net income year over year—from $2.13 billion to $840 million. Other financial metrics also showed deterioration, including a 60% drop in Q4 earnings per share, a 21% decline in net cash from operations, and a 30% fall in free cash flow. Tesla attributed rising operating costs primarily to increased spending on AI, R&D projects, and sales, general, and