<p>In typical<strong> Tesla </strong><span class="ticker-mention inline-flex items-center font-bold">(TSLA <span class="ml-1 text-green-900">+3.33%</span>)</span> fashion, the company made some big promises when it reported its Q4 results. However, one of the most notable things to come out of the report is that the company is trying to steer away from being an electric vehicle (EV) maker. In fact, it announced plans to shut down production of its luxury Model S and X vehicles and turn one of its factories into a manufacturing plant for its Optimus humanoid robots.</p>
<p>The converted factory is forecast to be able to produce 1 million robots a year. Meanwhile, the company plans to reveal the third generation of Optimus this quarter, with it being the first version created to be mass-produced. </p>
<div><img alt="Person charging car." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTM1ODkvbWFuLWNoYXJnaW5nLWV2LWVsZWN0cmljLXZlaGljbGUtY2hhcmdlLXN0YXRpb24uanBnJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTM1ODkvbWFuLWNoYXJnaW5nLWV2LWVsZWN0cmljLXZlaGljbGUtY2hhcmdlLXN0YXRpb24uanBnJnc9Mzg0MA"/>
<p>Image source: Getty Images.</p>
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<p>CEO Elon Musk also highlighted the company's cybercab progress and noted that production of robotaxis without steering wheels will begin in April. It expects to have autonomous vehicles within &#34;dozens of major cities&#34; by year-end if it needs to go state by state. To help bring its vision closer to reality, the company plans to spend over $20 billion in capital expenditures (capex) this year. </p>
<h2>Core auto business continues to struggle</h2>
<p>As for its actual results, the company saw a 16% drop in automobile deliveries in Q4. It was the third time in four quarters that the company saw deliveries decline year over year, with it seeing 13% drops in both the first and second quarters. Tesla did see an increase in deliveries in Q3, as some consumers rushed out to buy EVs ahead of the end of the $7,500 federal EV tax credit. However, the overall trend has been declining unit sales.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>Tesla's auto revenue fell by 11% to $17.7 billion in the quarter. The revenue was helped by a 38% increase in active FSD (full-self driving) subscriptions (which includes monthly subscriptions and upfront purchases) to 1.1 million users. Meanwhile, high gross margin regulatory credit revenue dropped by 10% to $401 million.</p><div><div><div><div></div></div></div></div>
<p>Overall, Tesla's revenue fell 3% year over year to $24.9 billion. Its energy generation and storage revenue surged 25% to $3.8 billion, while its service revenue climbed 18% to nearly $3.4 billion. Adjusted earnings per share (EPS) sank 17% to $0.50, beating the analyst consensus of $0.45, as compiled by <strong>LSEG</strong>. </p><div><div id="in_line_article_pitch_container"></div></div>
<p>Tesla's operating cash flow sank 21% in the quarter to $3.8 billion, and it generated $14.7 billion for the full year. Given its planned $20 billion in capex in 2026, it looks like the company will likely generate negative free cash flow this year.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Tesla Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4"/></div><div><h2>NASDAQ: TSLA</h2><div>Tesla</div></div></div><div><div><div>Today's Change</div><div>(3.33%) $13.85</div><div>Current Price</div><div>$430.41</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$1.4T</div><div>Day's Range</div><div>$422.70 - $439.88</div><div>52wk Range</div><div>$214.25 - $498.83</div><div>Volume</div><div>83M</div><div>Avg Vol</div><div>75M</div><div>Gross Margin</div><div>18.03%</div></div></div></div></section>
<h2>Is the stock a buy?</h2>
<p>Tesla's core auto business is struggling, with deliveries falling and high-margin regulatory credit revenue sinking. As such, the company is putting a lot more emphasis on its unproven robotaxi and robotics businesses.</p>
<p>Given the company's long track record of overpromising and underdelivering, I'd stay on the sidelines.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

<p>Tesla is shifting focus from electric vehicles to robotics, planning to produce 1 million humanoid robots annually and launch robotaxis by year-end. Despite a 16% drop in Q4 auto deliveries and an 11% decline in auto revenue, the company reported a 25% increase in energy revenue. With a projected $20 billion in capital expenditures, concerns arise over potential negative cash flow. Analysts suggest caution, given Tesla's history of unmet promises.</p>

- Tesla reported a 16% drop in Q4 automobile deliveries, marking a continued decline in sales trends.  
- The company plans to shift focus from electric vehicles to robotics, forecasting production of 1 million humanoid robots annually and initiating robotaxi production by April.  
- Overall revenue fell 3% year-over-year, while capital expenditures are projected to exceed $20 billion, potentially leading to negative free cash flow in 2026.

Should Investors Buy Tesla Stock After Upbeat Outlook on Robotaxis and Robots?