By Pras Subramanian

Tesla (TSLA) reported fourth quarter earnings that topped estimates after the bell on Wednesday. The company also said its Optimus robots were on track for an end of year start of production.

For the quarter, Tesla reported revenue of $24.90 billion vs. $25.11 billion estimated, a 2.4% drop from a year ago. Tesla posted adjusted earnings per share (EPS) of $0.50 vs $0.45 expected, with operating income of $1.41 billion vs. $1.32 billion estimated.

Tesla's Q4 gross margin came in better than expected at 20.1% vs. 17.1% estimated.

Tesla stock was up over 3% in after-hours trade before paring back slightly.

"Preparations continue in North America for the production ramps of Tesla Semi and Cybercab, both commencing 1H26, and production of the next-generation Roadster," the company said in its shareholder deck, adding that it will ramp up six new production lines across all its products.

Tesla said it plans to unveil Optimus V3 in Q1 of this year, with start of production planned "before the end of 2026 and eventual planned capacity of 1 million robots per year."

"It’s time to bring the Model X and S programs to an end with an honorable discharge," CEO Elon Musk said on the conference call, adding the production lines for those products will be for Optimus robots.

Tesla noted it removed the safety driver from customer rides on a limited basis for its robotaxi service in Austin, but didn't give a timeline for when they would all be removed. In terms of new metro areas, Tesla noted Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas would be targeted for robotaxi service in the first half of 2026.

Tesla said Full Self-Driving (FSD) subscriptions doubled in 2025, and it is still "pursuing regulatory approval in China and Europe. Tesla reported at the end of 2025 it had 1.1 million FSD subscribers.

A driverless Tesla robotaxi, a ride-booking service, moves through traffic, Sunday, June 22, 2025, in Austin, Texas. (AP Photo/Eric Gay). ASSOCIATED PRESS