Tesla made electric cars mainstream and became the world’s most valuable carmaker. But its share price is increasingly a bet on driverless taxis and robots. Here’s how it actually makes its money.
Tesla was founded in 2003, and Elon Musk became its biggest investor and later its chief executive. It launched its first car, the Roadster, in 2008, and the Model 3 and Model Y turned it into the world’s biggest seller of electric vehicles for several years.
In 2025, Tesla reported revenue of US$94.8 billion and a net profit of US$3.8 billion. It delivered 1.63 million vehicles, down from about 1.79 million in 2024, its second annual decline in a row.
Cars, energy and services
Cars are still the core of the business, with automotive revenue of US$69.5 billion in 2025. Most sales come from the Model Y and Model 3. It also sells the Cybertruck and the larger Model S and Model X.
Its sales have come under pressure from cheaper electric vehicles made by Chinese rivals such as BYD, the end of U.S. tax credits for EV buyers, an ageing range of models, and a backlash against Musk’s politics in some markets.
Tesla also earns money by selling regulatory credits to other carmakers that need them to meet emissions rules, although that income has been shrinking.
Its energy business is one of its fastest-growing parts. It sells Megapack batteries to power companies to store electricity from solar and wind farms, and Powerwall batteries for homes. Energy revenue reached US$12.8 billion in 2025.
Services and other revenue, including charging, repairs, insurance and used cars, has also been growing.
The bet on autonomy
Tesla’s share market value is far higher than its car sales alone would justify. Investors are betting on Musk’s vision of driverless technology.
Tesla sells Full Self-Driving software, which still requires a driver to supervise, as a one-off purchase or monthly subscription. It has launched a robotaxi service in Austin, Texas, including its two-seat Cybercab. It is also developing Optimus, a humanoid robot that Musk says could one day be its biggest business.
In the third quarter of 2026, Tesla’s revenue was flat at about US$28 billion and its profit fell 43 per cent, as it spent more on research into AI, robotaxis and robots.
The risks include falling car sales, competition from Chinese carmakers, safety and regulatory questions about self-driving technology, and the company’s reliance on Musk, whose attention is split across several businesses.
