Tesla's annual profits crashed by 46% to $3.8bn, marking the second consecutive year of steep declines. The company lost its position as the world's largest electric vehicle maker to a Chinese rival.
The financial downturn hit particularly hard in the fourth quarter. Net income plunged 61% to $840m. Gross profit margins improved to 20%, but the overall picture remained challenging.
Sales boycotts and brand damage linked to Elon Musk's political involvement contributed to the decline. Musk's work for President Donald Trump triggered customer backlash that hit the bottom line.
Energy business provides bright spot
Tesla's energy storage business surged 25% to $3.8bn in revenue. High demand from data centers drove the growth in this segment.
The stock rose 9% over the past year despite the profit slump. Investors focused on Musk's ambitious plans for robotaxis and other advanced technologies rather than current financial performance.
Chinese competitors capitalized on Tesla's struggles to claim the top position in global electric vehicle production. The shift underscores intensifying competition in the EV market.
Note: This article was created with Artificial Intelligence (AI).
