Tesla – a bet on the future: TSLA stock forecast for 2026

Tesla’s Q4 2025 report exceeded expectations, but 2025 marked the first year of revenue decline. The market continues to price in expectations of dominance in AI and robotics, rather than current cash flows.

Tesla’s Q4 2025 financial results surpassed analysts’ expectations: revenue reached 24.9 billion USD, slightly above forecasts, and non-GAAP earnings per share came in at 0.50 USD, exceeding the expected 0.45 USD.

However, for the full year 2025, the company’s revenue declined for the first time year-on-year (94.8 billion USD), as vehicle deliveries and net profit decreased due to weaker demand and increased competition.

Tesla improved its gross margin to 20.1%, marking a two-year high, with the automotive segment margin also rising to 17.9%, indicating more efficient operations. Elon Musk highlighted the strategic shift from traditional models (Model S and X) towards new directions, such as optimising Optimus robot production and developing robotaxi services, including the Cybercab, with plans to scale autonomous services.

The company also announced a substantial increase in capital expenditure, planning to invest over 20 billion USD in 2026 in AI infrastructure, robotics, and new technology lines, reflecting its aggressive investment strategy.

This article covers Tesla’s business, its sources of income, and the risks associated with investing in its stock. The review provides key metrics from quarterly reports, enabling a comparison of the company’s financial performance across periods, and includes a technical analysis of TSLA shares, which forms the basis for the Tesla stock forecast for 2026.

About Tesla, Inc.

Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning. In 2004, Elon Musk joined the co-founders and became the largest investor, assuming the role of Chairman of the Board. In 2008, Musk became the CEO of the company.

Initially, Tesla focused exclusively on electric vehicle production, but new business areas eventually emerged. The first electric car, the Tesla Roadster, was introduced in 2008, marking the beginning of the electric vehicle manufacturing era. In 2014, the company introduced a driver assistance system, which later evolved into a fully autonomous driving system, known as Full Self-Driving.

In 2016, Tesla acquired SolarCity, a company specialising in solar panel installations, which led to the creation of Tesla Energy – a division focused on manufacturing solar panels and energy storage devices. In the coming years, the company plans to launch robotaxi services with autonomous vehicles, enter the freight transport market with its Tesla Semi electric trucks, complete the development of the Optimus humanoid robot, and create the world’s largest AI cluster for the Dojo supercomputer.

Tesla, Inc.’s main revenue streams

Tesla, Inc. generates revenue from various sources, reflecting the diversity of its products and services. The main revenue streams include:

• Vehicle sales: covers both direct sales to consumers and leasing.
• Regulatory credits: regulatory credits sold to other automakers that need them to comply with environmental regulations.
• Energy generation and storage: manufacturing and selling solar energy systems and energy storage devices – Powerwall (for residential use), Powerpack (for commercial applications), and Megapack (for large-scale energy needs).
• Services and other revenues: maintenance and repair centres, the Supercharger network, and insurance services for Tesla vehicle owners.
• Software and autonomous driving: fees for advanced driver assistance systems (Autopilot), the Full Self-Driving (FSD) package, and software updates.
• Battery and powertrain sales: supplying other companies with electric batteries, power units, and drivetrains.
• Renewable energy projects: contracts with utility companies and large energy consumers for deploying Tesla’s energy storage solutions.

Tesla, Inc. Q3 2024 financial results

Tesla released its Q3 2024 earnings report on 23 October, highlighting the following key figures:

• Total revenue: 25.18 billion USD (+8%)
• Net profit: 2.17 billion USD (+17%)
• Earnings per share (EPS): 0.62 USD (+17%)
• Operating margin: 10.8% (+323 basis points)
• Capital expenditures: 3.51 billion USD (+43%)

Revenue breakdown by segment:

• Vehicle sales: 20.02 billion USD (+2%)
• Energy generation and storage: 2.38 billion USD (+52%)
• Services and other revenue: 2.79 billion USD (+29%)

In its commentary on the report, Tesla’s management noted that, despite revenue falling short of Wall Street’s consensus estimate (25.18 billion USD vs. 25.47 billion USD), the company beat profit forecasts, reporting EPS of 0.72 USD compared with the expected 0.60 USD. This was achieved through higher gross margins, supported by reduced per-unit production costs. Tesla delivered a record 462,890 electric vehicles in Q3 2024, its highest quarterly total to date.

Tesla plans to introduce more affordable vehicle models in H1 2025, expecting sales growth of 20-30% for the year. Mass production of the Cybercab is scheduled for 2026, with a target output of at least two million units. Additionally, Tesla announced that its 4680-battery cell technology is approaching cost competitiveness, which could significantly shift the economics of battery production.

Management expressed confidence in the company’s strategic initiatives and its leading position in both the automotive and energy sectors.

Tesla, Inc. Q4 2024 financial results

On 29 January, Tesla released its Q4 2024 earnings report, showing a 71% decline in net profit. The key figures from the report are as follows:

• Total revenue: 25.70 billion USD (+2%)
• Net profit: 2.12 billion USD (–71%)
• Earnings per share (EPS): 0.60 USD (–71%)
• Operating margin: 6.2% (–204 basis points)
• Capital expenditures: 2.78 billion USD (+21%)

Revenue breakdown by segment:

• Vehicle sales: 19.80 billion USD (–8%)
• Energy generation and storage: 3.06 billion USD (+113%)
• Services and other revenue: 2.84 billion USD (+31%)

Tesla set a new record for electric vehicle deliveries in Q4 2024, with 495,570 units sold. The Tesla Model Y was the best-selling car worldwide in 2024. Elon Musk highlighted the successful production ramp-up at the Berlin and Texas Gigafactories, which played a key role in achieving these figures.

Tesla’s energy storage business also showed significant growth, driven by increased demand for products such as Megapack and Powerwall. Musk emphasised that this segment is essential to Tesla’s automotive business.

The Full Self-Driving (FSD) technology continues to evolve, with the Beta program now available to more users, helping collect valuable data. Musk expressed confidence that Tesla will achieve full vehicle autonomy soon. Looking ahead, the company aims to increase vehicle deliveries by approximately 50% year-on-year while expanding its model lineup and boosting production capacity at existing factories. Tesla also focuses on cost reduction and improving operational efficiency.

A notable remark from Elon Musk concerned the Optimus robots. He stated that by the end of 2025, several thousand Optimus units will be capable of performing practical tasks, initially tested and deployed at Tesla’s factories. Musk outlined Tesla’s ambition to rapidly scale Optimus production, projecting that even with a 50% annual growth rate, production could reach 100 million units per year within a few years. He underscored the importance of robotics and AI for Tesla’s future, seeing them as part of the company’s strategy to lead not only in electric vehicles but also in AI and robotics – a vision that could make Tesla the most valuable company in the world.

Tesla, Inc. Q1 2025 financial results

On 22 April, Tesla released a weaker-than-expected Q1 2025 report. Its highlights are outlined below:

• Total revenue: 19.34 billion USD (–9%)
• Net income: 0.93 billion USD (–39%)
• Earnings per share: 0.27 USD (–40%)
• Operating margin: 2.1% (–343 basis points)
• Operating expenses: 2.75 billion USD (+9%)
• Capital expenditures: 1.49 billion USD (–46%)

Revenue by segment:

• Vehicle sales: 13.97 billion USD (–20%)
• Energy generation and storage: 2.73 billion USD (+67%)
• Services and other revenue: 2.63 billion USD (+15%)

Tesla’s Q1 2025 report reflected a challenging period for the company. Financial performance was lower than expected, with EPS (non-GAAP) at 0.27 USD, below the forecast of 0.42 USD. The automotive segment, the company’s primary revenue source, contracted by 20%, driven by a 13% decline in deliveries and lower average selling prices. These results highlight the impact of the temporary suspension of Model Y production, an aggressive pricing policy, and a reliance on regulatory credit revenues (595 million USD), without which the automotive division would have posted a loss. Macroeconomic factors, uncertainty surrounding trade policy, and reputational risks associated with Elon Musk’s public activity further complicated the company’s position.

Nevertheless, Tesla’s energy business posted an impressive 67% increase in revenue, reaching 2.73 billion USD and delivering a record gross profit, confirming the company’s success in the energy storage segment. Free cash flow turned positive, reaching 664 million USD compared with a deficit of 2.53 billion USD a year earlier, indicating effective capital management despite significant AI investments.

The strategic focus on autonomous technology remains the company’s key growth driver. The launch of Full Self-Driving (FSD) as a paid service was planned for June, with millions of autonomous vehicles projected to be deployed by the end of 2025.

The Optimus humanoid robot project, with a target production of one million units per year by 2029, underscored Tesla’s ambition to expand beyond the automotive sector.

The market reacted positively to the report, with the stock gaining over 7% following the release, reflecting confidence in these initiatives, particularly in light of Musk’s statements about prioritising Tesla. However, short-term risks remain considerable. The withdrawal of the growth forecast for deliveries in 2025 signalled demand uncertainty, exacerbated by potential tariffs and competition from Chinese manufacturers such as BYD. A 9% increase in operating expenses and the lack of clarity regarding the launch of more affordable models heightened this uncertainty.

Tesla’s management provided no specific forecasts for Q2 2025, stating instead that they would revise the 2025 outlook after the Q2 2025 results, citing ongoing uncertainty in the automotive and energy markets amid shifting trade policies and macroeconomic conditions. Analysts forecast Q2 2025 revenue of around 24.45 billion USD, although Tesla has not confirmed or revised this figure.

Given these factors, Tesla remains a highly risky investment. The energy segment, AI development, and long-term strategic vision offer substantial growth potential. However, delivering on these ambitions will require Elon Musk to return to active management of the company, as he promised. His involvement in US politics negatively affected Tesla’s reputation, and the company now faces the challenge of restoring trust among both consumers and investors.

Tesla, Inc. Q2 2025 financial results

Tesla released its Q2 2025 earnings report on 23 July. The key figures compared with the same period in 2024 are as follows:

• Total revenue: 22.49 billion USD (–12%)
• Net income: 1.39 billion USD (–23%)
• Earnings per share: 0.40 USD (–23%)
• Operating margin: 4.1% (–220 basis points)
• Operating expenses: 2.95 billion USD (–1%)
• Capital expenditures: 2.39 billion USD (+5%)

Revenue by segment:

• Automotive sales: 16.66 billion USD (–6%)
• Energy generation and storage: 2.78 billion USD (–7%)
• Services and other revenue: 3.04 billion USD (+17%)

Tesla’s Q2 2025 results were disappointing, with revenue down 12% year-on-year to 22.5 billion USD, and net income falling to 1.39 billion USD – the company’s weakest quarterly performance in a decade. The primary factor behind the decline was a 17% decrease in automotive sales revenue, totalling 16.66 billion USD. Operating profit dropped by 42%, while free cash flow totalled just 146 million USD. Overall liquidity also declined, reaching 36.8 billion USD at the end of the quarter. Tesla delivered 384,122 vehicles during the period, representing a 14% year-on-year decrease.

Overall, Q2 revealed serious challenges for Tesla, including a decline in global demand for electric vehicles, intensified competition (particularly from Chinese manufacturers), aggressive pricing, and the withdrawal of subsidies in the US. Taken together, these factors put pressure on margins and profitability. Notably, around 37% of Tesla’s quarterly profit came from the sale of regulatory credits (439 million USD). Additional negative factors included trade barriers and Elon Musk’s political activity, which drew criticism and weakened demand in Europe.

Despite this, Tesla still has several growth drivers. One of them is the planned launch of a fully autonomous robotaxi, which could create a new subscription-based model and scalable robotaxi fleet. Another is the affordable electric vehicle priced at approximately 25,000 USD, which could significantly expand the customer base. The development of energy storage and robotics platforms also promises growth over the next two years.

For Q3 2025, Tesla did not provide formal guidance for key indicators. Elon Musk warned that the upcoming quarters could be challenging, citing macroeconomic headwinds, the expiry of US incentives, new tariffs on Chinese-made components, and regulatory uncertainty in autonomous driving. The CFO added that production of the latest affordable model was expected to begin gradually.

Tesla, Inc. Q3 2025 financial results

On 22 October, Tesla released its Q3 2025 report. The key figures compared with the same period in 2024 are as follows:

• Total revenue: 28.10 billion USD (+12%)
• Net profit: 1.77 billion USD (–29%)
• Earnings per share: 0.50 USD (–31%)
• Operating margin: 5.8% (–501 basis points)
• Operating expenses: 3.43 billion USD (+50%)
• Capital expenditure: 2.25 billion USD (–36%)

Revenue by segment:

• Automotive sales: 21.21 billion USD (+6%)
• Energy generation and storage: 3.42 billion USD (+44%)
• Services and other income: 3.48 billion USD (+25%)

In Q3 2025, Tesla delivered a record 497,099 electric vehicles (+7% y/y), supported by a surge in US demand ahead of the expiry of the 7,500 USD tax credit. The energy business also reached a record high, with 12.5 GWh of installed energy storage systems.

Revenue rose to a record level, but profit declined due to higher costs and changes in the revenue mix. The margin contracted as vehicle production costs increased, income from regulatory credit sales decreased, and, unlike last year, there was no one-off gain from FSD. Meanwhile, research and administrative expenses increased, resulting in a 40% year-on-year decline in operating profit. A key positive in the quarter was the record free cash flow of 3.99 billion USD and an increase in cash reserves to 41.6 billion USD.

The automotive segment increased revenue but saw lower profitability – rising component prices and tariffs offset the benefit of higher volumes. The energy business became the main growth driver, with Megapack and Powerwall contributing more revenue and profit. The services segment (including maintenance, charging stations, etc.) continued to grow at a double-digit rate.

The company did not provide specific figures for the next quarter, noting risks related to tariffs, trade policy, and changes in government support. Tesla is betting that over time, a greater share of profit will come from software, artificial intelligence, and services. The company has sufficient financial reserves to support its plans, including the launch of robotaxis in California and the expansion of its energy business.

Tesla, Inc. Q4 2025 financial results

Tesla released its Q4 2025 report on 28 January. Below are the key figures compared to the same period in 2024:

• Total revenue: 24.90 billion USD (–3%)
• Net income: 1.76 billion USD (–16%)
• Earnings per share: 0.50 USD (–17%)
• Operating margin: 5.7% (–50 basis points)
• Operating expenses: 3.60 billion USD (+39%)
• Capital expenditures: 2.39 billion USD (–14%)

Revenue by segment:

• Vehicle sales: 17.69 billion USD (–11%)
• Energy generation and storage: 3.84 billion USD (+25%)
• Services and other revenue: 3.37 billion USD (+18%)

Tesla reported earnings per share of 0.50 USD and revenue of 24.9 billion USD for Q4 2025, surpassing expectations despite a decline in sales compared to the previous year. Gross margin reached a two-year high of 20.1%, driven by improved cost efficiency and higher-priced products. For the full year 2025, total revenue was 94.8 billion USD, slightly down from 2024, with profit decreasing due to macroeconomic challenges and strategic investments.

Tesla also disclosed subscriber numbers for the first time in its report, announcing 1.1 million active Full Self-Driving (FSD) subscribers, representing significant growth compared to the previous year. Tesla’s energy business, including energy generation and storage, also showed resilience and strategic importance. While revenue from the automotive segment declined, the energy sector grew by 25% compared to the same period in 2024.

Regarding Bitcoin reserves, Tesla did not change its digital assets in Q4 2025, ending the period with 11,509 BTC on its balance sheet. As Bitcoin prices declined, the company reported an unrealised impairment loss (around 239 million USD) under GAAP standards, but there were no purchases or sales. Management and reports emphasised that this is an accounting effect, not a strategic shift. Tesla’s position signals long-term Bitcoin holding rather than active trading, viewing it as a treasury reserve.

Tesla did not provide specific revenue or delivery numbers for Q1 2026. Nevertheless, the company outlined an aggressive plan for the full 2026 year, focused on capital expenditures and a shift in manufacturing priorities. Tesla’s capital expenditures are expected to exceed 20 billion USD in 2026 (compared to approximately 9 billion USD in 2025), with funds directed towards AI infrastructure, new production lines, and the Optimus project. The company officially announced the discontinuation of Model S and Model X production, with its Fremont plant to be repurposed for mass production of Optimus robots, aiming for a production capacity of 1 million units per year. In the first half of 2026, Tesla plans to launch the Robotaxi service in 7 US cities, with the start of Cybercab serial production and the mass production of Optimus robots scheduled for the end of 2026.

Tesla, Inc. key valuation multiples analysis

Below are the key valuation multiples for Tesla based on Q4 2025 results, calculated with a share price of 421 USD:

Tesla – valuation multiples analysis – conclusion

Tesla is an extremely overvalued growth asset with solid financial health, but with a critically low current return on invested capital. The P/E (392) and P/FCF (254) ratios indicate that the current stock price is almost entirely disconnected from the company's fundamental financial results. The market values the company not for what it is earning now, but for its potential future dominance in areas like robotics, AI, and Full Self-Driving (FSD). At these multiples, any slowdown in growth could lead to a sharp decline in share prices.

The free cash flow yield of 0.4% is critically low. In comparison, the yield on US government bonds is significantly higher. This implies that Tesla's business in 2025 requires significant capital expenditures, which have yet to translate into commensurate cash flows for shareholders.

Despite the extremely high valuation, Tesla is safe from bankruptcy. The negative net debt and a Net Debt/EBITDA ratio of –2.63 show that the company has a healthy cash cushion. It can afford aggressive investments without being concerned about its debt load.

Tesla continues to trade as a technology company rather than an automaker. Investing in Tesla shares at around 420 USD is a bet on technological breakthroughs, not current operational profit.

Expert forecasts for Tesla, Inc. shares for 2026

• Barchart: 14 out of 41 analysts rated Tesla shares as Strong Buy, 1 as Buy, 17 as Hold, and 9 as Strong Sell. The upper price target is 600 USD, with the lower bound at 125 USD.
• MarketBeat: 17 out of 40 analysts assigned a Buy rating to the shares, 14 recommended Hold, and 9 rated Sell. The upper price target is 600 USD, with the lower bound at 25 USD.
• TipRanks: 11 out of 30 professionals rated the shares Buy, 12 as Hold, and 7 as Sell. The upper price target is 600 USD, with the lower bound at 25 USD.
• Stock Analysis: 7 out of 33 experts rated the shares as Strong Buy, 9 as Buy, 10 as Hold, 3 as Sell, and 4 analysts gave a Strong Sell rating. The upper price target is 600 USD, with the lower bound at 25 USD.

Tesla, Inc. stock price forecast for 2026

Tesla shares are trading within an ascending channel. In December 2025, the stock reached a peak of 490 USD before declining. This movement can be seen as a correction within the upward trend.

The base-case forecast for Tesla shares suggests a further decline towards support at 380 USD. At this level, the correction is expected to come to an end, followed by a resumption of price growth within the broader uptrend. The first upside target would be the 490 USD resistance level. If this level is breached, the next target would be the upper boundary of the ascending channel near 600 USD.

The alternative forecast for Tesla stock suggests a break below the 380 USD support level. In this scenario, the correction could extend towards the trendline around 300 USD. A rebound from this level would signal the completion of the corrective phase and a renewed move higher within the upward trend. In this case, the primary upside target would again be the 490 USD resistance level.

Risks of investing in Tesla, Inc. shares

Considering the factors that could negatively impact the company’s future earnings is crucial when investing in Tesla, Inc. shares. Below are the main risks:

• Increased competition: Tesla faces growing competition from both traditional automakers, such as Volkswagen, General Motors, and Ford, as well as newer players, including BYD, Rivian, and Lucid. The competition is particularly fierce in China, where BYD has already surpassed Tesla in total electric vehicle production, including hybrid vehicles. Increased competition could lead to a loss of market share and price wars, reducing Tesla’s profitability.
• Economic conditions: elevated interest rates and economic downturns can impact consumer spending on expensive goods, such as electric vehicles. If interest rates remain high or increase further, the cost of financing a new Tesla could deter potential buyers.
• Policy changes: changing government policy, such as the cancellation or reduction of tax incentives for electric vehicles, could affect demand for Tesla cars. State-level policies, such as a potential new credit system in California, where Tesla may not meet the criteria, could also further impact sales.
• Manufacturing and supply chain issues: delays or inefficiencies in ramping up production of new models could prevent Tesla from meeting market demand. Supply chain disruptions, chip shortages, or factory shutdowns could also affect production capabilities.
• Technological challenges: if Tesla’s advancements in autonomous driving or battery technology fail to meet expectations, or if competitors outpace Tesla in these areas, it could result in a loss of competitive advantage and investor confidence.
• Global Market Dynamics: fluctuations in exchange rates, trade tensions (especially with China, where Tesla has significant sales and production), or new tariffs could impact Tesla’s international revenues.

These factors, in combination, could influence Tesla’s revenue trajectory in 2026, creating a challenging environment where the company will need to navigate both internal and external challenges to maintain or improve its market position.

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