In a stunning announcement during Tesla’s Q4 2025 earnings call, CEO Elon Musk revealed the company will end production of the Model S and Model X next quarter—bringing the curtain down on the vehicles that launched Tesla into the luxury EV market over a decade ago.

As a result, total revenues for 2025 only fell by 3 percent. But Tesla saw a 38 percent drop in income from operations, and its expenses went up by 23 percent. As a result, the company’s once-envied profit margin was just 4.9 percent for the year, down from 7.2 percent last year. (In 2022, Tesla had a 23.8 percent profit margin.)

Tesla did it. It invested in Elon Musk's AI company xAI. "On January 16, 2026, Tesla entered into an agreement to invest approximately $2 billion to acquire shares of Series E Preferred Stock of xAI as part of their recent publicly-disclosed financing round,

Tesla plans to more than double capital spending to a record high of more than $20 billion this year - but little of it will go to its traditional business of selling electric vehicles to human drivers.