Tesla (NASDAQ:TSLA) executives used the company’s fourth-quarter 2025 Q&A webcast to outline a shift toward autonomy, robotics, and large-scale manufacturing investments, while also providing updates on vehicle programs, margins, and cash flow. The call featured opening remarks from CEO Elon Musk and CFO Vaibhav Taneja, followed by investor and analyst questions focused heavily on robotaxi deployment, Full Self-Driving (FSD), Optimus, and capital spending plans.
Mission update and a major product transition
Musk said Tesla has updated its mission to “amazing abundance,” framing the change as an optimistic view of a future shaped by AI and robotics. He described a goal of improving safety, reducing costs, and expanding access to goods and services “without compromise,” while also preserving the environment.
Autonomy and robotaxi: paid rides, Cybercab production timeline
Musk and other executives repeatedly emphasized that Tesla’s future strategy is anchored in autonomy. Musk said Tesla has begun providing paid rides with no safety monitor in the car in Austin, adding that the service recently progressed to operating without a chase car. He said Tesla is being cautious and prioritizing avoiding injuries or serious accidents.
Executives also highlighted Tesla’s plan to allow owners to add or subtract their vehicles from an autonomous fleet in a model Musk compared to Airbnb. Musk suggested that customers could potentially earn enough by lending their car to the fleet to offset costs, describing it as a scenario where an owner could “get paid to own a Tesla.”
On expansion, Musk said Tesla expects to have fully autonomous vehicles in “somewhere between a quarter and half of the United States by the end of the year,” pending regulatory approval, and said that without federal preemption for autonomous vehicles, the rollout must proceed city-by-city or state-by-state.
Discussing Tesla’s dedicated autonomous vehicle, Musk said the Cybercab has no steering wheel or pedals and is designed to optimize fully considered cost per mile for autonomous driving. He said Tesla expects to start Cybercab production in April and that the manufacturing ramp will follow an S-curve. Musk argued that because a large share of miles traveled involve one or two passengers, Tesla expects Cybercab production to eventually exceed all other Tesla vehicles combined.
In response to a question on robotaxi scale, Musk said Tesla is “well over 500” vehicles carrying paid customers between the Bay Area and Austin, describing fleet size as variable by demand and time of day. He added that the program is expected to grow rapidly, saying it will likely “double every month.”
Quarterly financial and operating highlights
Taneja said Q4 2025 included a pull-forward of U.S. demand into Q3 ahead of a “higher consumer credit cliff,” while other regions saw increasing demand. He cited record deliveries in smaller countries including Malaysia, Norway, Poland, Saudi Arabia, and Taiwan, and said Tesla ended 2025 with a larger backlog than in recent years. He noted that none of those countries have the latest version of “FSD supervised” available yet.
Key metrics and items mentioned on the call included:
- Automotive margin (excluding credits): improved sequentially from 15.4% to 17.9%, according to Taneja.
- Deliveries and profit: automotive gross profit was flat sequentially despite 16% lower deliveries, which Taneja attributed primarily to regional mix with proportionately more deliveries in APAC and EMEA.
- FSD paid customers: adoption reached nearly 1.1 million paid customers globally; Taneja said nearly 70% were upfront purchases.
- FSD model transition: Tesla is transitioning fully to a subscription-based model for FSD beginning this quarter; Taneja said in the short term this will impact automotive margins as net additions shift to subscriptions.
- Energy: Taneja said Tesla posted another quarterly record in gross profit for energy and ended the year with nearly $12.8 billion in revenue, up 26.6% year over year, driven by Megapack and Powerwall demand.
- Energy outlook: Tesla expects increasing deployments in 2026 with the launch of Megapack 3 and Megablock, but anticipates margin compression from low-cost competition, policy uncertainty, and tariffs.
- Services and other: margin declined from 10.5% to 8.8%, primarily due to higher employee-related costs at service centers as Tesla prepares for fleet growth. Taneja said Supercharging margin improved and that robotaxi-related costs (not material) are also included in this line item.
- Total gross margin: Tesla ended the quarter above 20.1%, which Taneja said it had not achieved in over two years, despite lower fixed-cost absorption and tariff impacts.
- Tariffs: Taneja said tariff impacts exceeded $500 million in Q4.
- Net income headwinds: Taneja cited mark-to-market charges on Tesla’s Bitcoin holdings, which depreciated 23% versus the prior quarter, and unfavorable foreign exchange effects primarily tied to large intercompany borrowings.
- Free cash flow: Taneja said Tesla generated $1.4 billion in free cash flow and that CapEx came in slightly below prior guidance of $9 billion.
Battery packs, Optimus timing, and factory staffing
Taneja said Tesla’s biggest global constraint remains battery packs. He said teams have addressed issues by putting 4680 cells in non-structural packs and continue to iterate improvements.
On Optimus, Musk said Tesla remains in an R&D phase and that while the robot has performed basic factory tasks, it is not in material usage because older versions are deprecated as new versions are developed. Musk said he does not expect significant Optimus production volume until “probably the end of this year.” He also said Tesla expects to increase headcount at the Fremont factory over time and added that Tesla does not have layoff plans.
Musk also said Tesla likely will only make autonomous vehicles long-term, with an exception for the next-generation Roadster, which he said the company is hoping to debut in April.
CapEx surge, chip strategy, and xAI collaboration
Taneja said Tesla expects 2026 to be a “huge investment year,” with CapEx expected to exceed $20 billion. He listed spending related to six factories: a refinery, an LFP factory, Cybercab, Semi, a new Mega factory, and the Optimus factory. He also cited spending on AI compute infrastructure, expanding existing factories, and growing the robotaxi and Optimus fleets. He said the figure does not include potential investments in solar cell manufacturing or a semiconductor “Terafab,” which remain in early phases and will be updated in future quarters.
Addressing funding, Taneja said Tesla has more than $44 billion of cash and investments and expects to use internal resources initially, while exploring bank financing tied to cash flows from the robotaxi fleet. He added that longer-tail infrastructure projects could require additional funding options, including debt or other means.
Musk said he has been spending significant personal time on Tesla’s AI5 chip design, calling it among the company’s most critical priorities. He said Tesla plans to use AI5 chips in data centers and currently uses AI4 chips alongside NVIDIA hardware for training. Musk said chip production could become Tesla’s limiting growth factor in three to four years, and argued Tesla may need to build a large-scale domestic “Terafab” integrating logic, memory, and packaging to reduce supply-chain and geopolitical risk.
On xAI, executives said Tesla has already integrated Grok into Tesla vehicles and described the investment as aligned with “Master Plan Four.” Musk suggested Grok could help optimize management of a large autonomous fleet and coordinate large groups of Optimus robots for complex tasks.
About Tesla (NASDAQ:TSLA)
Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.
Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.
