Tesla made smallest annual profit since the pandemic, plans to spend big on robotaxis and robots

TECH

Tesla made smallest annual profit since the pandemic, plans to spend big on robotaxis and robots

2026-01-29 08:26 Last Updated At：12:47

NEW YORK (AP) — Tesla’s annual profit plunged to its lowest level since the pandemic five years ago as it lost the title of the world’s biggest electric vehicle maker to a Chinese rival and boycotts hammered sales.

The EV company run by Elon Musk reported Wednesday that net income last year dropped 46% to $3.8 billion. It was the second year in a row of steep declines. The drop came despite the introduction of cheaper models and Musk's promise to remain laser-focused on the company after a foray into U.S politics.

Still, Tesla investors have kept the faith in Musk. The stock is up 9% in the past year.

Musk has been urging investors to focus less on car sales and more on what he considers a bright new artificial intelligence future of robotaxis ferrying millions in cars without drivers, or even steering wheels, and robots watering plants and taking care of elderly parents.

On a conference call, Musk underlined that shift by announcing Tesla had decided to close down production of two older car models, S and X, in the second quarter and convert a Fremont, California, factory to produce its Optimus robots instead.

Making those future ambitions a reality will take money. Officials said Tesla would spend big on AI and others new projects this year, more than doubling capital expenditures to $20 billion. And the company revealed it had recently invested $2 billion in the artificial intelligence company xAI, raising potential conflicts of interest issues as Musk holds big stakes in both companies.

That AI business, known for its Grok AI assistant, has courted controversy for echoing Musk’s views on race, gender, and politics and, recently, producing nonconsensual sexualized deepfake images.

Tesla's fourth quarter profit also fell sharply, dropping 61% to $840 million, or 24 cents. But excluding one-time charges, net income totaled 50 cents per share, compared to analysts' forecasts of 45 cents.

“They’ve got aging product that is less and less competitive as other manufacturers come out with new models, then there is the general brand destruction," said Telemetry analyst Sam Abuelsamid. "Musk‘s involvement in politics has turned off customers.”

There were hopeful signs in the report, too. Tesla's energy storage business, though small compared to the car sales, posted strong numbers last quarter with revenues surging 25% to $3.8 billion reflecting demand from new datacenters sucking up energy around the U.S.

Tesla's gross profit margins were another bright spot, leaping to 20% last quarter from 16% a year ago.

“Tesla’s ability to show improving profitably was a surprise,” said Morningstar analyst Seth Goldstein.

Goldstein said he was also encouraged by plans outlined in Tesla’s earnings report to roll out robotaxi service in Houston, Miami and five other cities in the first half of this year. In the conference call, the company also said that it would begin producing its two-seated Cybercab with no wheels or pedals in the same time frame.

But Musk is well know for making promises with deadlines he never meets.

Musk said that European regulators would approve its partial self-driving software in the first three months last year, a potential big boost to Tesla sales there. But that hasn't happen yet. And a strong revival in sales Musk heralded midway through the year also failed to materialize.

The robotaxi program has progressed slowly, which Musk told investors is due to Tesla being extremely cautious to avoid mishaps. Tesla promised robotaxi rides without anyone driving the car, but until recently the cars had supervisors inside to grab the controls in case something went wrong. Tesla has now removed the safety drivers in Austin where it launched the service in June.

For some on Wall Street that is enough to keep pushing the stock up.

One of Wall Street’s most bullish analysts, Dan Ives of Wedbush Securities, expects robotaxis will be in more than 30 cities by the end of this year, and that Tesla will capture 70% of the global market for self-driving cars in a decade.

Ives and others are also encouraged that Musk has shifted his focus back to the company after spending months as head of a government cost-cutting team in Washington.

But it’s not clear his attention will remain as undivided in the new year. He has plans to take his rocket company SpaceX public, possibly in June, in what many expect to be a blockbuster IPO that make him the world’s first trillionaire — but also possibly distract him.

Bulgaria wins the 70th Eurovision Song Contest with upbeat party anthem 'Bangaranga'

VIENNA (AP) — Bulgarian singer Dara won the 70th Eurovision Song Contest on Saturday with her infectious party anthem “Bangaranga,” giving the southeast European country its first-ever victory in the competition.

Israeli competitor Noam Bettan came second after a contest in Vienna clouded by protests and a boycott over the country’s participation.

Dara beat 24 other competitors during Saturday’s grand final of the sequin-drenched pop music competition. The song’s infectious beats and tightly choreographed dance routine proved a hit with both national juries in participating countries and viewers around the world, whose votes together decide the winner.

“This is unbelievable,” Dara said at a post-show news conference early Sunday. “I don't even know what's going on."

She thanked “everyone who felt the bangaranga and felt connected to the force.”

The 27-year-old performer is an established name in her homeland, but had not been among the favorites to win. Still, “Bangaranga” is the sort of pop banger that Eurovision does so well, with its irresistible exhortation: “Surrender to the blinding lights. No one’s gonna sleep tonight. Welcome to the riot.”

Dara has spoken about battling with anxiety, and described bangaranga as an inner force that allows people to “drop this mask of chasing perfection.” She has said the song draws on Bulgaria's kukeri, elaborately costumed men who perform ritual dances to ward off evil spirits.

Romania’s Alexandra Căpitănescu came third in the contest with the rock song “Choke Me.” Australian star Delta Goodrem was fourth with the slick midtempo ballad “Eclipse,” and Italian crooner Sal Da Vinci came fifth with “Per Sempre Si,” or “Forever Yes.”

The Finnish duo of pop star Pete Parkkonen and classical violinist Linda Lampenius, who were strong favorite on betting markets, ended up in sixth place.

Eurovision historian Dean Vuletic said the contest often produces surprises.

“Eurovision has never really been a contest for big stars,” Vuletic said. “People like to see the underdog on stage. They like to the artist-in-the-making on stage or an artist from a smaller, poorer country on stage.”

Acts from 25 countries, whittled down from an initial 35, took the stage at the Wiener Stadthalle arena in Vienna to battle for the continent’s pop crown. A fiery Finnish violinist, a Moldovan folk rapper and a Serbian metal band were among the contenders in a campy, colorful contest that has been likened to the World Cup with songs instead of soccer.

And like global sports, it often becomes entangled in politics. The contest has been clouded for a third year by calls for Israel to be excluded over its conflicts in Gaza and elsewhere, with five longtime participants — Spain, the Netherlands, Ireland, Iceland and Slovenia — boycotting in protest.

The political tensions have clouded a contest that over the decades has given the world the perfect pop of ABBA’s “Waterloo” and the ageless “Nel blu, dipinto di blu” — better known as “Volare” — along with a host of Euro-pop party anthems.

The contestants had just 3 minutes to win over viewers. Jets of flame, glitter guns and wind machines worked overtime in a show that celebrated Europe’s eclectic musical tastes.

Serbian metal band Kravina offered hard rock angst, there was brooding choral rock from Albania’s Alis, and Cypriot contestant Antigoni had the crowd on its feet with dance floor filer “Jalla.”

Female solo artists dominated: There was an empowering power ballad from Germany’s Sarah Engels, gospel-tinged R&B from Poland’s Alicja, ethereal beauty from Ukraine’s Leléka, techno-pop from Sweden’s Felicia and opera-pop from France's Monroe.

Male soloists were well represented too, by the likes of Aidan from Malta, Denmark’s Søren Torpegaard Lund, rock-edged singer Jonas Lovv from Norway and Austria's techno-pop performer Cosmo.

Party rap with a political edge was in the house thanks to Satoshi’s ebullient “Viva, Moldova” and Greek artist Akylas’ playful “Ferto.”

British act Look Mum No Computer came last with the jokey novelty song “Eins, Zwei, Drei,” winning just a single point. Bulgaria gained 516 points in the contest’s convoluted voting system, and Israel received 343.

Tension over Israel's participation in Eurovision looks unlikely to subside.

This is the second year in a row that Israel has come second, largely because of a huge vote from the public. Eurovision organizers tightened voting rules this year after allegations the country had mounted an intense lobbying campaign to get votes for its competitor.

Bettan was loudly cheered, though there was a smattering of boos as he performed “Michelle,” a rock ballad in Hebrew, French and English. Earlier in the week, four people were ejected for trying to disrupt his semifinal performance.

Hundreds of protesters against Israel's inclusion marched near the contest arena before Saturday's final, some holding placards saying “Block Eurovision.” Pro-Palestinian groups also staged an outdoor concert on Friday under the banner “No stage for genocide.”

“Inviting Israel on such a beautiful stage as the Eurovision Song Contest stage is an affront to all the people who believe in humanity, who believe in love and togetherness,” said Congolese-Austrian artist Patrick Bongola, one of the organizers.

Despite blow to Eurovision's finances and viewership from the boycott, the contest is eyeing expansion, with a spinoff Eurovision Song Contest Asia due to take place in Bangkok in November.

Vuletic said political controversy is nothing new. The first Eurovision boycott was in 1969 — by Austria, which refused to send a delegation to Spain under dictator Francisco Franco.

“We’ve seen very politicized editions of the contest in the recent past,” Vuletic said. “All of them were very much mired in political controversy, yet Eurovision continues."

Associated Press writers Hilary Fox and Philipp Jenne in Vienna and Maria Sherman in New York contributed to this report.

Tesla made smallest annual profit since the pandemic, plans to spend big on robotaxis and robots

TECH

Tesla made smallest annual profit since the pandemic, plans to spend big on robotaxis and robots

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