Tesla’s core car business has essentially stopped growing. Its AI spending, meanwhile, is accelerating like a Model S Plaid off the line.
The company delivered 1.65 million vehicles in 2025, a 6.7% decline from the prior year. At the same time, Tesla has committed to over $25 billion in capital expenditures for 2026, the bulk of it aimed at artificial intelligence, Full Self-Driving technology, the Optimus humanoid robot, and custom AI chips.
The numbers tell a clear story
Full-year 2025 was rough by almost every financial measure that matters. Net income fell 46% to $3.8 billion. Fourth-quarter profits cratered by 61%. Multiple quarters missed Wall Street delivery expectations, and the annual delivery decline was the first sustained downturn in the company’s history as a mass-market manufacturer.
There was a bright spot in Q2 2026, when deliveries bounced to 480,126 units and beat analyst expectations. But even that beat didn’t exactly spark a celebration. The market reacted negatively, reflecting deeper anxieties about Tesla’s ballooning AI costs eating into near-term margins.
