29 January 2026
If you are covering Tesla’s Q4 and full year 2025 results, please see the following comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Tesla’s Q4 numbers paint a bit of a mixed picture. Group revenues fell by three per cent, though still came in marginally ahead of consensus expectations. Automotive revenues were down 11 per cent, with auto credits helping to soften the decline. Meanwhile, the group’s operating margin came in at just 5.7 per cent - slightly better than had been forecast.
“While 2025 marks Tesla’s first annual revenue decline, these results have become largely irrelevant to the share price and investment case. Tesla offered no formal guidance, but on the product side the company expects to begin production of the Cybercab, the Tesla Semi and the Megapack 3 in volume in 2026. What is proving more important for the stock is the agreement Tesla entered into earlier this month, which will see it invest $2 billion of preferred stock in xAI, extending Tesla’s push to embed AI capabilities into physical products, including its Optimus robot.
“The real headline from the earnings call was management’s plan to more than double capital expenditure to around $20 billion in 2026, compared with $8.5 billion last year. This is expected to support new production lines, including refinery, LVP, Cybercab, Semi and a new Megafactory. Tesla has also said it will end production of its Model S and Model X vehicles at its Fremont manufacturing plant and will replace it with its Optimus humanoid robot programme, which will be supported by incremental AI training investments.
“This level of spending is not unusual relative to Tesla’s peers and comes in below the average for ‘magnificent six’ stocks. The implication, however, is that investors should brace for the possibility of higher cash burn.”
