The company announced it was ending production of its higher-end Model S and Model Y, and turning that production space over to making humanoid robots.

As a result, total revenues for 2025 only fell by 3 percent. But Tesla saw a 38 percent drop in income from operations, and its expenses went up by 23 percent. As a result, the company’s once-envied profit margin was just 4.9 percent for the year, down from 7.2 percent last year. (In 2022, Tesla had a 23.8 percent profit margin.)

LONDON, Jan 29 (Reuters) - Tesla shares rose 1.8% in Frankfurt on Thursday, a day after the company said it will invest $2 billion in CEO Elon Musk's artificial-intelligence company xAI and that production plans for its Cybercab robotaxi were on track for this year.

The automaker also said it would invest $2 billion in xAI, the artificial intelligence company controlled by its C.E.O., Elon Musk, and stop making the two oldest cars in its lineup.

Elon Musk said Tesla Inc. needs to build and operate what he is calling a “TeraFab” to manufacture semiconductors, a massive undertaking that will cost billions of dollars and mark another expansion beyond what had been the company’s core electric vehicle business.

Tesla's earnings report comes weeks after Elon Musk's automaker reported another decline in vehicle deliveries.

Tesla reports fourth-quarter earnings after the closing bell on Thursday. Investors will be listening for updates on the company's AI future and on how Tesla is contending with a tougher EV market.

Waymo robotaxi is closing the gap on pricing and wait times next to Uber and Lyft — key metrics riders factor in when choosing a ride, a study found.