Investor's Corner
The ‘Tesla Effect’ is starting to extend from legacy carmakers to the oil industry
Back in February, self-made billionaire Don Gao from China mentioned that the “Tesla Effect” continues to grow even in markets beyond the California-based company’s reach. Gao, who owns Positec – a maker of power equipment – uses lithium-ion batteries for his company’s products, and they are steadily becoming a potent rival for heavyweight brands like Black & Decker. The billionaire entrepreneur noted that Tesla’s commitment to battery tech is spilling over into other industries, to the point where consumers’ perception of battery-powered devices is now changing.
“This Tesla Effect is a major trend and has really changed consumers’ perception of things that are battery driven and their capabilities,” he said.
Tesla did not come up with the electric car, nor did it come up with lithium-ion batteries. Both technologies were present even before the company was founded. That said, and partly thanks to the unraveling of Elon Musk’s first Master Plan, Tesla was able to capture an audience and a dedicated consumer base with its first vehicle – the Tesla Roadster. The small sports car was mostly a proof-of-concept, in the way that it was intended to show that electric cars need not be boring or limited in range. The car was successful enough that Tesla was able to follow it up with the Model S, a vehicle designed from the ground up to be a high-performance, long-range electric car. The rest is history.
Tesla’s electric cars were able to capture the interest of car buyers, even those that are particular about power and performance. It should be noted that Tesla’s electric cars were showing strong sales even before the company rolled out features like Autopilot. The company’s electric vehicles, from the Model S, to the Model X, to the Model 3, were desirable simply because they were excellent cars. They just happen to be powered by electricity instead of gas.
Since Tesla is still in the process of growing, its electric cars have been competing in the luxury segment. The electric vehicles themselves are not traditional luxury cars, with their minimalistic and almost spartan interiors, but they do provide a premium experience through their deep integration of software and hardware. Over the years, Tesla’s electric cars sold well, until such time that they started outselling mainstays from legacy carmakers like BMW and Mercedes-Benz. The Tesla Model 3, the company’s first attempt at a mass-market car, was recently listed as the 4th best-selling passenger car in the US, beating out competitors from the luxury midsize segment like the Mercedes-Benz C-Class.
In the same way that companies unrelated to Tesla are starting to explore the potential of lithium-ion batteries partly due to the electric car maker, a number of legacy automakers have accelerated their transition to electrified transport as well. Among the German carmakers, several have expressed their intent to come up with their own premium electric vehicles. Mercedes-Benz has the EQ program, Volkswagen just announced that it is investing ~$7 billion into e-mobility, and Porsche has the Taycan, a high-performance electric car that’s set to meet the Model S head-on in the premium EV market. Most of these carmakers would likely not acknowledge it, but there is little doubt that the transition to electrified transport was expedited by the efforts of a small electric car startup from Silicon Valley.
In a way, the Tesla Effect is happening at the perfect time. Several regions in the world are shifting towards cleaner forms of transportation. China plans to eventually ban diesel and gasoline-powered cars in its major cities. France and Britain have both committed to banning gas-powered automobiles in the future as well. Earlier this month, the EU Parliament voted for a 20% cut in CO2 emissions from new cars and vans in 2025 and a 40% reduction in 2030, accelerating the region’s transition towards cleaner transport. To effectively support the transition, carmakers, from startups like Tesla to pedigreed veterans like Mercedes-Benz, have to ramp their efforts at creating even more compelling, cost-effective electric vehicles.
In a recent segment on CNBC, Paul Sankey of Mizuho Securities mentioned that the “Tesla Effect” is starting to make its way to the oil industry as well. Last Thursday, oil prices tumbled as much as 4% amidst concerns about the fallout from the United States’ sanctions on Iran, the OPEC’s third-biggest crude oil producer. Wall St. analysts noted that oil could be in striking distance of $100 per barrel – an adjustment that would be felt by owners of fossil fuel-powered cars. The Mizuho analyst noted that part of the reasons behind the struggles of the oil industry is the shifting perception towards oil itself.
“Essentially, the big issue is the so-called “Tesla Effect,” the general “End of the Oil Age” theme that is a problem for these (oil) stocks. As the oil price goes up, especially to the levels we’re at now and potentially beyond, it’s almost as if the Tesla Effect could be exacerbated by the potential for higher oil prices to accelerate the end of the Oil Age. The Tesla Effect is the overall concept that (while) the 20th century was driven by oil, the 21st century will be driven by electricity. There’s a 30-year transition, and we’re somewhere probably 10 years into that transition. Ultimately, (the) terminal value of oil has been severely affected by the potential for us to change behavior,” the analyst said.
What is quite remarkable is that Tesla is nowhere close to reaching the company’s overall goals. Elon Musk once noted that Tesla would not stop until all cars in the road are electric. And the truth is, even if the company reaches its production targets for the Model 3 and the Model Y and its future Truck and compact sedan, Tesla would not be able to transition the auto industry towards electrification on its own. What Tesla could do, though, is to accelerate this transition, and if recent projects by legacy carmakers are any indication, it appears that the Silicon Valley-based company is doing just that.
Investor's Corner
LIVE BLOG: Tesla (TSLA) Q4 and FY 2025 earnings call
Tesla’s (NASDAQ:TSLA) earnings call follows the release of the company’s Q4 and full-year 2025 update letter.
Tesla’s (NASDAQ:TSLA) earnings call follows the release of the company’s Q4 and full-year 2025 update letter, which was published on Tesla’s Investor Relations website after markets closed on January 28, 2025.
The results cap a quarter in which Tesla produced more than 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products. For the full year, Tesla produced 1.65 million vehicles and delivered 1.63 million, while total energy storage deployments reached 46.7 GWh.
Tesla’s Q4 and FY 2025 Results
According to Tesla’s Q4 and FY 2025 Update Letter, the company posted GAAP earnings per share of $0.24 and non-GAAP EPS of $0.50 in the fourth quarter. Total revenue for Q4 came in at $24.901 billion, while GAAP net income was reported at $840 million.
For full-year 2025, Tesla reported GAAP EPS of $1.08 and non-GAAP EPS of $1.66 per share. Total revenue reached $94.83 billion, including $69.53 billion from automotive operations and $12.78 billion from the company’s energy generation and storage business. GAAP net income for the year totaled $3.79 billion.
Earnings call updates
The following are live updates from Tesla’s Q4 and FY 2025 earnings call. I will be updating this article in real time, so please keep refreshing the page to view the latest updates on this story.
16:25 CT – Good day to everyone, and welcome to another Tesla earnings call live blog. There’s a lot to unpack from Tesla’s Q4 and FY 2025 update letter, so I’m pretty sure this earnings call will be quite interesting.
16:30 CT – The Q4 and FY 2025 earnings call officially starts. IR exec Travis Axelrod opens the call. Elon and other executives are present.
16:30 CT – Elon makes his opening statement and explains why Tesla changed its mission to “Amazing Abundance.” “With the continued growth of AI and robotics, I think we’re headed towards a future of universal high income,” Musk said, adding that along the way, Tesla will still be improving its products while keeping the environment safe and healthy.
16:34 CT – Elon noted that the first steps for this future are happening this year, thanks to Tesla’s autonomy and robotics programs, which will be launching and ramping this year. He also highlighted that Tesla will be making major investments this year, though the company will be very strategic when it comes to its funding. “I think it makes a ton of strategic sense,” Musk said.
16:36 CT – Elon also announces the end of the Model S and Model X programs “with an honorable discharge.” If you’re interested in buying a Model S or X, it’s best to do it now, Musk said. The Model S and Model X factory in Fremont will be replaced by an Optimus line. “It’s slightly sad, but it is time to bring the S and X program to an end. It’s part of our overall shift to an autonomous future,” Musk said.
16:38 CT – Elon discusses how Unsupervised FSD is now starting for the Robotaxi service. He noted that these Unsupervised Robotaxis don’t have any chase cars as of yesterday. He reiterated Tesla’s plans for owners to be able to add their own vehicles to the Robotaxi fleet. Autonomy target for the end of the year is about a quarter or half of the United States, Musk said.
16:41 CT – Elon noted that the Tesla Energy team is absolutely killing it. He also stated that Tesla expects its Energy business to continue growing, and that the “solar opportunity is underrated.”
16:43 CT –Elon also added that Tesla Optimus 3 will be unveiled in about three months, probably. The Model S and Model X line in Fremont will be a million-unit Optimus production line. Looks like Optimus is really coming out of the gate with large, meaningful volumes. “The normal S curve for manufacturing ramps is longer for Optimus,” Musk stated. “Long term, I think Optimus will have a significant impact on the US GDP.”
16:44 CT – Elon closes his opening statements with a sincere thanks to the Tesla team. He also noted that he feels fortunate to be able to work alongside such a talented workforce.
Elon ends his opening remarks with an optimistic prediction about the future.“The future is more exciting than you can imagine,” he concluded.
16:47 CT – Tesla CFO Vaibhav Taneja makes his opening remarks. He discusses several aspects of Tesla’s Q4 milestones. He noted that Tesla Energy achieved yet another gross profit record during the fourth quarter. There’s insane demand for the Megapack and Powerwall. Backlogs for these products are healthy this 2026. He also noted that Tesla ended 2025 with a bigger vehicle order backlog compared to recent years.
16:53 CT – Investor questions from Say begin. The first question is about Tesla’s expectations for the Robotaxi Network. Lars Moravy noted that it has the advantage of manufacturing and scale, and Tesla believes that the Robotaxi Network will significantly grow year over year. Elon highlighted that the Cybercab will be produced with no steering wheel or pedals. No fallback. Elon also noted that Tesla expects to produce more Cybercabs than all its other vehicles combined in the future.
16:51 CT – The next question is if Tesla still expects to launch new models, such as affordable cars. Lars Moravy noted that Tesla did release affordable variants last year, and Tesla is still pushing hard to lower its costs. That being said, Tesla is really pushing the Cybercab as its total addressable market is larger than consumer-owned cars. Lars also mentioned that Tesla will produce different vehicles for its Robotaxi services.
16:56 CT – Elon noted that eventually, Tesla will produce mostly autonomous cars. The exception would be the next-generation Roadster, which will be a true driver’s car.
17:03 CT – A question about Elon’s past comments about a potential next pickup truck was asked. Lars noted that the Cybertruck is still performing well in the electric pickup truck segment, though Tesla is known for flexibility. Elon added that Tesla will be transitioning the Cybertruck line to a fully autonomous vehicle line. He also stated that the Cybertruck is a useful vehicle. “An autonomous Cybertruck will be useful for that.”
17:10 CT – A question was asked about when FSD will be 100% Unsupervised. Elon noted that 100% Unsupervised FSD is already being used today, though only in the Austin Robotaxi program. Tesla is still being extremely careful with its rollout.
When asked about Tesla’s chip program, Elon noted that he feels pretty good about Tesla’s chip strategy. But in terms of selling Tesla’s chips outside Tesla, the company has to make sure it has enough chips for Optimus robots, data centers, and other programs first.
17:18 CT – Analyst questions begin. First up is Wolf Research. He asks about Tesla’s increasing Capex, specifically where the majority of it is going. The Tesla CFO noted that programs in six factories are going live this year, so that consumes Capex. The Optimus program also consumes a lot of resources. The growth of Tesla’s current capacity is also consuming a lot of resources. As for how these programs will be funded, the CFO pointed to Tesla’s massive war chest, as well as initiatives such as the Robotaxi Network.
17:21 CT – Morgan Stanley asks about Tesla’s xAI investment. The analyst asked about more information about how Tesla and xAI will work together. The CFO noted that this investment is part of Master Plan Part IV. Elon also mentioned some advantages for xAI’s technology for Tesla’s products, like Grok being used to manage a Robotaxi fleet or a group of Optimus robots.
17:24 CT – Barclays asks Elon about the constraints on memory. Does Tesla have any near term constraints for Tesla vehicles’ memory? Elon responded that the Tesla AI computer is already very compute and memory-efficient. The intelligence per gigabyte is important. Musk noted that Tesla is ahead of the industry by an order of magnitude or more.
17:29 CT – Cannacord asks about startups from China entering the humanoid market. What competitive advantage does Optimus have compared to these rivals? Elon stated that he believes China will be a key competitor in the humanoid robot market. China will be the toughest competitor for Tesla. That being said, Elon noted that Tesla believes Optimus will be ahead in real-world intelligence, electromechanical dexterity, and hand design.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings results
Tesla’s Q4 and FY 2025 earnings come on the heels of a quarter where the company produced over 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products.
Tesla (NASDAQ:TSLA) has released its Q4 and FY 2025 earnings results in an update letter. The document was posted on the electric vehicle maker’s official Investor Relations website after markets closed today, January 28, 2025.
Tesla’s Q4 and FY 2025 earnings come on the heels of a quarter where the company produced over 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products.
For the Full Year 2025, Tesla produced 1,654,667 and delivered 1,636,129 vehicles. The company also deployed a total of 46.7 GWh worth of energy storage products.
Tesla’s Q4 and FY 2025 results
As could be seen in Tesla’s Q4 and FY 2025 Update Letter, the company posted GAAP EPS of $0.24 and non-GAAP EPS of $0.50 per share in the fourth quarter. Tesla also posted total revenues of $24.901 billion. GAAP net income is also listed at $840 million in Q4.
Analyst consensus for Q4 has Tesla earnings per share falling 38% to $0.45 with revenue declining 4% to $24.74 billion, as per estimates from FactSet. In comparison, the consensus compiled by Tesla last week forecasted $0.44 per share on sales totaling $24.49 billion.
For FY 2025, Tesla posted GAAP EPS of $1.08 and non-GAAP EPS of $1.66 per share. Tesla also posted total revenues of $94.827 billion, which include $69.526 billion from automotive and $12.771 billion from the battery storage business. GAAP net income is also listed at $3.794 billion in FY 2025.
xAI Investment
Tesla entered an agreement to invest approximately $2 billion to acquire Series E preferred shares in Elon Musk’s artificial intelligence startup, xAI, as part of the company’s recently disclosed financing round. Tesla said the investment was made on market terms consistent with those agreed to by other participants in the round.
The investment aligns with Tesla’s strategy under Master Plan Part IV, which centers on bringing artificial intelligence into the physical world through products and services. While Tesla focuses on real-world AI applications, xAI is developing digital AI platforms, including its Grok large language model.
Below is Tesla’s Q4 and FY 2025 update letter.
TSLA-Q4-2025-Update by Simon Alvarez
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Tesla brings closure to flagship ‘sentimental’ models, Musk confirms
LIVE BLOG: Tesla (TSLA) Q4 and FY 2025 earnings call
