Tesla shrugs off sales slump with AI pivot and Optimus target

Tesla (NASDAQ:TSLA) signaled a definitive shift from automaker to AI powerhouse Wednesday, reporting fourth-quarter earnings that surpassed analyst estimates even as its core electric vehicle business continues to cool.

The Austin-based company posted adjusted earnings of $0.50 per share, beating the $0.45 expected by Wall Street.

While revenue fell 2.4% year-over-year to $24.90 billion, a surprise expansion in gross margins to 20.1% sent shares up more than 3% in after-hours trading.

The financial results were secondary to CEO Elon Musk’s roadmap for 2026, which centers on a massive hardware and robotics scale-up.

Tesla confirmed that production for the highly anticipated Cybercab and Tesla Semi remains on track for the first half of 2026.

More significantly, the company set an ambitious year-end goal for the production of its "Optimus" humanoid robots, with a long-term capacity target of one million units annually.

To fuel these ambitions, Tesla disclosed a $2 billion investment in xAI, Musk’s artificial intelligence startup, aiming to tighten the integration between the two entities.

The pivot toward "real-world AI" comes at a critical juncture.

Tesla delivered 1.64 million vehicles in 2025, an 8% annual decline that highlights the pressure from Chinese rivals and the loss of U.S. federal tax credits.

With the automotive business facing "headwinds," as the company described them, the narrative has shifted almost entirely to the monetization of Full Self-Driving (FSD) software—which saw subscriptions double in 2025—and the eventual removal of safety drivers from its nascent robotaxi fleet in Austin.