Elon Musk personally axed the Model S/X models. Tesla released its worst annual report ever and shifted its focus to autonomous driving and robotics.

Tesla's annual revenue declined for the first time! Net profit hit a five - year low, and Musk axed two flagship models to focus on robots.

According to CheDongXi on January 28th, just recently, at Tesla's Q4 2025 earnings conference, CEO Elon Musk announced that the last batch of Model S and Model X vehicles will be "respectfully retired" and officially discontinued next quarter.

Musk said, "It's a bit sad, but it's really time to end the Model S and Model X projects." However, Musk also said that Tesla will continue to support existing owners, "as long as they are still using the cars."

▲ Tesla Model X

Currently, both Model S and Model X are produced at the Fremont factory in California. Musk revealed that after the discontinuation, the factory will switch to producing the Optimus humanoid robot.

▲ Tesla Model S

In addition to officially announcing the discontinuation of the two flagship models, Tesla's entire Q4 2025 earnings conference call mainly focused on Tesla's AI layout. Musk spent a large amount of time introducing the progress of the Optimus humanoid robot, Robotaxi, FSD, etc., while downplaying the content related to vehicle production, sales, and gross - margin targets.

Correspondingly, Tesla has just released an unimpressive 2025 earnings report.

In 2025, its annual revenue declined by 3%, reaching $94.827 billion (approximately RMB 658.7 billion). The annual revenue of the automotive business declined by 10%, reaching $69.526 billion (approximately RMB 483 billion). The annual net profit was nearly "halved", down 46% year - on - year, reaching $3.794 billion (approximately RMB 26.4 billion). The net profit in Q4 was $840 million (approximately RMB 5.8 billion), down about 61% year - on - year.

With poor sales of electric vehicles, Tesla regards projects such as the Full Self - Driving software (FSD), robotaxi service, and Optimus robot as the keys to leading future industry changes.

01.

Musk Warns:

Capital Expenditure Will Exceed $100 Billion This Year

The focus of Tesla's Q4 conference call was on the key technologies driving its future vision.

Musk set the tone in his opening remarks, clearly stating that 2026 will be a year of huge investment, with expected capital expenditure exceeding $20 billion (approximately RMB 138.9 billion).

▲ Tesla Semi truck

Specifically, the direction of these huge investments is quite clear:

In the automotive business, North America is still preparing to increase the production capacity of the Tesla Semi and Cybercab. Both models will start production in the first half of 2026. Musk emphasized that the Cybercab will not be equipped with a steering wheel or pedals, and there is no backup plan. Tesla expects the future production volume of the Cybercab to exceed the sum of all its other models.

▲ Tesla Cybercab

Tesla is also preparing for the production of the next - generation Roadster. Musk also reiterated the debut date of the next - generation Roadster, expecting the new Roadster model to make its first appearance in April.

In the robotics business, Tesla plans to release the third - generation Optimus in the first quarter of this year. This version has undergone significant upgrades, including the latest hand design.

The third - generation Optimus is the first robot designed for large - scale production. Currently, preparations are underway for the first production line, and production is planned to start before the end of 2026, with a final planned annual production capacity of 1 million robots.

▲ Tesla Optimus humanoid robot

In the battery business, Tesla's lithium refinery has started trial production. It is the first refinery in North America to refine lithium hydroxide from spodumene, using a simpler, lower - cost, and more environmentally friendly process. Tesla has started producing battery packs with 4680 batteries for some Model Y models, which helps to cope with the increasingly complex supply - chain challenges brought by trade barriers and tariff risks.

In the self - driving taxi operation, Tesla began testing the driverless Robotaxi in Austin in December 2025 and started removing safety supervisors from passenger trips in a limited area in January this year, which will further expand the scale and coverage of the Robotaxi fleet.

▲ Both the driver and passenger seats of Tesla's Robotaxi are empty

In terms of the supervised Full Self - Driving (FSD), Tesla launched the FSD (supervised) in South Korea. In just one month, local users drove more than 1 million kilometers using the software.

▲ Changes in the driving mileage of Tesla's FSD

While continuing to seek approval from Chinese and European regulators for the "full - fledged" FSD, Tesla has started providing in - car experience services for consumers in Italy, Germany, France, and Switzerland.

▲ Tesla FSD

02.

Humanoid Robots Are Not Yet Widely Used

Chinese Companies Will Be Tesla's Biggest Competitors

During the Q&A session, Musk mainly answered questions about the future plans of the Optimus humanoid robot and Tesla's chips, and did not release much new information about the automotive part.

Notably, when asked about Tesla's gross - margin target for single models this year, Musk said that Tesla is not entangled about single models as transportation is undergoing a transformation.

He said, "We believe that we should not blindly follow the traditional vehicle - sales model. That set of indicators is not suitable for the future. We need to examine the new field in a more comprehensive and long - term way." He said that in the future, Optimus and related software will become the driving force for performance growth.

An investor asked Musk why he invests a large amount of personal energy in Tesla's chip design and what the driving factors for this in - depth participation are.

He replied, "I've spent a lot of time on this, more than on anything else at Tesla. I may even have to work overtime. I think it's very necessary, and I'm very excited about it."

He also introduced the plan for the AI5 chip, which will be used in the data center. Everything Tesla does is to make the AI5 chip more efficient, have better performance, and bring greater improvements in hardware.

▲ Tesla AI5 chip

An analyst asked what tasks the Optimus humanoid robots are performing in Tesla's factory and how many there are.

Musk replied, "Optimus can still be said to be in the R & D stage. Tesla has an Optimus factory, but Optimus is not widely used in practical applications. However, we believe that the Optimus humanoid robot will bring maximum value in many scenarios and can do many things. We don't expect a large - scale deployment of Optimus in our factory by the end of this year."

▲ Tesla Optimus

He also actively promoted the Optimus robot, saying that it is much easier to train Optimus to perform tasks compared with previous robots.

Musk introduced that the third - generation Optimus will be a general - purpose robot that can observe and learn human behavior. There are many different companies working on similar products, but what Tesla has done is really great.

Since the third - generation Optimus hardly contains any elements from the existing supply chain and everything is new, Musk estimated that the production - capacity ramp - up curve of the third - generation Optimus may be longer than that of other products, but it's not certain.

Tesla will significantly increase the factory's production capacity next.

When asked about the cost target of the humanoid robot, Tesla officially replied, "Currently, Optimus is in the early stage of corresponding large - scale deployment and a large number of tests are still being conducted. Therefore, it doesn't make practical sense to discuss the cost target in this area now, and we don't want to discuss what the meaningless cost target is."

Notably, an investor asked Musk, "You are going to manufacture more vehicles and more robots. What do you think of the entire manufacturing supply chain, and what role will China play in such a plan?"

Musk only replied regarding the humanoid - robot field: "China is very good at expanding the scale of manufacturing, and the open - source community is very prosperous. I think many models are from Chinese open - source models. This is really excellent."

He said that China has done a great job in manufacturing, and undoubtedly many Chinese companies will become Tesla's biggest competitors.

However, Musk also said, "As far as we know, we haven't seen any important competitors posing a threat to us at present. But in the future, we think many Chinese companies will cause us a lot of trouble. There is no doubt that the competition will be very fierce."

Musk said that the capabilities of Optimus will exceed any robot currently under development in China and it is a cross - era product. "Optimus is a machine companion that shares the same concepts with humans and conforms to people's impressions of humans. I think this is an extremely challenging engineering task, and Tesla has undoubtedly done a great job."

03.

Annual Revenue Declined for the First Time

Q4 Net Profit Plummeted by 60%

From this newly released annual report, Tesla still faces great financial pressure.

In 2025, Tesla's total revenue reached $94.827 billion (approximately RMB 658.7 billion), a 3% decline from last year's $97.69 billion (approximately RMB 678.6 billion).

▲ Tesla's financial performance in 2025

Tesla's profitability indicators continued to deteriorate. In 2025, Tesla's GAAP (Generally Accepted Accounting Principles) net profit reached $3.794 billion (approximately RMB 26.4 billion), a 46% year - on - year decline, hitting a five - year low compared with $7.091 billion (approximately RMB 49.3 billion) in 2024.

In the same year, Tesla's GAAP gross margin reached 18.0%, compared with 17.9% in the same period last year.

Specifically in the automotive business, Tesla's total annual automotive - business revenue was $69.526 billion (approximately RMB 483 billion), a 10% year - on - year decline.

In the energy - generation and energy - storage business, Tesla's revenue in 2025 was $12.771 billion (approximately R