Even though Donald Trump became U.S. president, which analysts considered the most favorable option for Elon Musk and his companies, 2025 was a poor year for Tesla, with annual revenue falling 3% to $94.8 billion and fourth-quarter car sales dropping 11% year-on-year.
That said, the numbers were better than market expectations: Quarterly earnings per share were $0.50 (down 17% from the previous year), exceeding the consensus estimate of $0.45. Revenue reached $24.9 billion (down 3% from the previous year), slightly above the $24.8 billion forecast.
As for what went wrong, competition is intensifying, particularly from China’s BYD — recall Musk’s 2011 comment, when he laughed at the idea of BYD as a competitor and asked, “Have you seen their cars?” — while demand has also softened following the expiration of the federal tax credit for electric vehicles.
Will Tesla's decision to halt production of its Model S and Model X vehicles at its California plant in order to focus on humanoid robots improve its situation?
For now, the market doesn't buy into the idea of a miraculous turnaround driven by a strategic shift. Even the news that SpaceX could go public has given Tesla stock a significant boost.
For starters, the skepticism seems to stem from Tesla’s previous promise to produce 5,000 robots by 2025 — a plan it ultimately abandoned, modest as it was. Now, the company has set an ambitious target of 1 million robots per year, a dramatic leap that raises serious questions about its feasibility.
Furthermore, there are serious doubts about Tesla's ability to compete with Chinese manufacturers, which are expected to begin mass-producing humanoid robots in 2026.
More broadly, the entire humanoid robotics industry faces structural challenges: high production costs, limitations in artificial intelligence and robotic dexterity, dependence on foreign chips, and regulatory barriers.
Perhaps most importantly, it is still unclear who will actually buy Tesla's robots. According to Gartner, humanoid robots are not yet ready for large-scale adoption. Current models are too expensive, consume excessive energy, and are not sufficiently adaptable to complex, dynamic environments such as supply chains and manufacturing.
The bottom line is that Tesla continues to struggle against growing competition from Chinese electric vehicle manufacturers, while its strategic shift toward robotics remains highly uncertain, both in terms of results and timing.
That said... what if SpaceX, following xAI's example, merged with Tesla? That would certainly change the landscape for Tesla's stock.
