A preview of the upcoming Tesla Q4 financial report.
Everyone needs to understand what the market is primarily looking at regarding Tesla. Simply put, Wall Street is basically no longer looking at the earnings per share, or EPS numbers, but rather at Tesla's new growth logic.
1. Confirmed bad news: no need to look at car sales anymore
First, let's talk about the confirmed bad news: the car delivery data is already known, with 1,636,000 cars sold in 2025, a year-on-year decline of 8.6%.
2. This financial report may still have highlights.
This is the first time in recent years that Tesla has experienced a significant decline in annual sales. So, the growth story of car sales can be temporarily set aside. However, I believe this quarter's financial report will still have highlights.
In the fourth quarter, energy storage deployed a record 14.2 GWh. What does this concept mean?
This alone can contribute nearly 3.5 to 3.8 billion dollars in revenue. This largely compensates for the loss from fewer car sales. Moreover, this area will develop rapidly in the context of widespread power shortages in the AI field, and in the future, it won't be a big issue to contribute around 200 billion in market value. So, apart from revenue, there is a metric we need to focus on, which is profit.
III. What we should really focus on is not revenue, but gross profit
Specifically, it refers to the automotive gross margin after deducting carbon credits, because carbon credits are policy dividends, and deducting them reflects the true earning ability. Moreover, as traditional car manufacturers increase their electric vehicle production, this money will eventually go to zero. So if this number falls below 15%, then the stock price may face short-term pressure.
Because the market finds that Tesla is actually not fundamentally different from other car manufacturers, but this is also the common consensus in the market right now. However, I speculate that thanks to the drop in lithium prices and other raw materials, along with the high gross margin of the energy business as a hedge, the overall gross margin may unexpectedly stabilize, or even slightly rise month-on-month. If it can reach over 16%, then the market will take a breather; the fundamentals haven’t collapsed, and we can still listen to Musk continue telling the AI story. Of course, more importantly, what will determine whether the stock price rises or falls the next day depends on Musk's words.
IV. Guidance for 2026, here are two scenarios
The pessimistic scenario is that management continues to emphasize the transition period, being vague, then the stock price will definitely be reassessed.
But if it's an optimistic scenario, for example, if Musk provides a timeline for the rollout of Robotaxi, or gives the specific R&D and production progress of the humanoid robot Optimus, the market will immediately overlook the current decline in sales and directly pay for the future. Of course, there are also very important details to pay attention to, which is the discussion about the FSD subscription rate in the conference call.
A few days ago, Musk announced that starting from February 14, 2026, Tesla will eliminate the one-time payment option. FSD will completely transition to a subscription-only model. Whether Tesla can gradually transition from a company that sells hardware for a one-time fee to a software company that collects tolls depends on whether this number shows significant improvement, which is also key to the valuation model switch. So, to summarize, the upcoming financial report is likely to have average data but relatively solid logic.
My judgment is that the market has basically digested the bad news of poor car sales, and the current point of contention completely depends on how Musk tells the story of 2026. If the story is convincing, it could actually be a counterattack after the bad news is fully released!
Finally, Binance is about to officially launch the $TSLA contract before the financial report is released, so we can participate in Tesla's financial market trend more conveniently!
