What is Tesla's current financial performance?

Tesla's GAAP net earnings have dropped 75% from their 2023 peak to $3.79 billion, with EV revenues declining and operating expenses increasing.

How much of Tesla's profit comes from regulatory credits?

In 2025, approximately 40% of Tesla's net earnings, totaling $1.51 billion, were derived from the sale of regulatory credits and digital assets.

What is Tesla's adjusted Price-to-Earnings ratio?

Excluding non-core earnings, Tesla's adjusted Price-to-Earnings ratio stands at 632, based on a market capitalization of $1.44 trillion and core earnings of $2.28 billion.

Home / Business and Economy / Tesla's Stellar Stock Hides Plummeting Profits

Tesla's Stellar Stock Hides Plummeting Profits

30 Jan

•

Summary

Tesla's net earnings dropped 75% to $3.79 billion.
EV revenues fell 16% while expenses increased 44%.
Nearly 40% of profits came from selling regulatory credits.

Tesla's Stellar Stock Hides Plummeting Profits

Tesla's recent financial disclosures reveal a significant decline in profitability, with GAAP net earnings dropping 75% from their 2023 peak to $3.79 billion. This downturn is largely attributed to a 16% decrease in EV revenues over the last two years, contrasted by a substantial 44% increase in overall operating expenses. Despite growth in battery and charging services, these smaller segments cannot offset the decline in the core EV business.

The company has also increased its capital investments, adding $31 billion to its assets for new plants and equipment, even as earnings have fallen. This expansion makes Tesla more capital-intensive, potentially reducing capital efficiency. A significant portion of Tesla's profits, approximately 40% or $1.51 billion in 2025, stems from the sale of regulatory credits and digital assets, rather than its primary car and battery operations. These 'non-core' earnings are projected to diminish over time.