Tesla $TSLA ( ▼ 0.23% ) reports fourth-quarter and full-year 2025 earnings Wednesday, and expectations are set for a tougher print. Analysts see both earnings and revenue slipping compared to last year, while spending continues to ramp.
That combination is putting pressure on margins and free cash flow heading into the results.
Earnings Down, Costs Up
FactSet consensus estimates call for non-GAAP earnings per share of $0.45, down sharply from $0.73 a year ago. Revenue is expected to come in around $24.8 billion, also lower than last year’s $25.7 billion.
At the same time, capital expenditures are projected to rise to nearly $3 billion from $2.8 billion last year. With Tesla continuing to cut vehicle prices to move inventory, automotive gross margins are also expected to decline, further squeezing profitability.
Investors Want AI and Robotaxi Clarity
The earnings call will be less about the quarter and more about what comes next. Investors are looking for concrete updates on Tesla’s future-facing projects, including timelines for removing safety drivers from Robotaxis, progress on Cybercab production, expansion of unsupervised Full Self-Driving, and development of Tesla’s next-generation chips.
After years of shifting targets, the market is focused on how close any of these initiatives are to becoming real revenue drivers.
The Big Question: How Expensive Is the AI Push
Tesla has already signaled that capital spending will rise substantially in 2026. That means investors will be listening closely for details on how much Tesla’s AI and autonomy ambitions could cost, and how long the company is willing to accept margin pressure in exchange for future growth.