The Brief

Tesla's profit dropped 46% year over year, the company revealed in its earnings update Wednesday evening.

That was not exactly a surprise — in fact, it was better than most analysts had expected. Tesla had already reported sales for the quarter, which showed the continuation of a slump that stretched through much of the year. More revenue from other parts of the company, like a growing energy storage business, haven't made up for the fact that Tesla's not selling as many cars as it used to.

Tesla, once the undisputed global leader in electric vehicle sales, has lost that crown as its brand reputation has soured and competition — particularly from China — has grown more intense.

But the company continues to maintain that it's in the process of transitioning from being a car company to a "physical AI company," with value based on its self-driving vehicle technology, its robotaxi service and, eventually, humanoid robots.

As part of that pivot, Tesla is discontinuing its higher-end Model S and Model X vehicles. The vehicles were already made in much smaller numbers than the more affordable Models 3 and Y, but had symbolic value. The Model S, in particular, was a major step forward for Tesla and electric vehicles; Tesla called it the "world's first mass-produced, highway-capable EV," and it was the first vehicle built at Tesla's Fremont factory.

Instead of more traditional vehicles, the company is focusing its attention on its "Cybercab," a vehicle designed without a steering wheel or pedals that's meant to replace existing Teslas in the company's nascent robotaxi business.

"We would expect over time to make far more Cybercabs than all of our other vehicles combined," CEO Elon Musk said on a quarterly earnings call with investors and analysts Wednesday night. "The vast majority of miles traveled will be autonomous in the future … I'm just guessing, but probably less than 5% of miles driven will be where somebody is actually driving the car themselves."

And as for robots, Tesla is taking the Model S and Model X production lines in the Fremont plant and dedicating that space to production of the "Optimus" humanoid robot, which Musk said would launch production this year. (Musk has a history, which he often jokingly refers to, of overpromising on timelines.)

Musk warned Wall Street that as part of these plans, the company would be shelling out a lot of cash in the year ahead — an eye-popping $20 billion, more than double what the company spent on capital expenditures in 2025.

"We're making big investments for an epic future," Musk said.

Tesla lost its spot as world's top EV seller 

A Chinese company, not Tesla, is now the world's top EV maker.

In 2025, the Chinese automaker BYD sold more than 2.25 million battery-powered vehicles, according to the company.

Tesla sold 1.65 million, fewer than it sold in 2024. It's the second straight year of sales declines.

In late 2023, Musk had warned investors that Tesla was in between "growth waves," setting expectations low for 2024 but promising a return to rapid expansion with the launch of a "next-generation" vehicle that was tentatively planned for 2025.

That second growth wave hasn't materialized. Tesla repeatedly teased a much cheaper Tesla, rumored to sell for about $25,000 thanks to revolutionary changes in manufacturing. Even after Reuters reported that the vehicle was dead, Musk publicly maintained it was coming.

But it wasn't. Musk eventually confirmed that the company would focus its major redesign efforts on the Cybercab. Instead of offering a significantly cheaper vehicle, the company rolled out slightly cheaper versions of the Model 3 and Model Y.

Meanwhile, the electric vehicle market in the U.S. has taken a substantial hit. Sales were already underperforming expectations, and then President Trump took office and his administration began to systematically roll back EV incentives and regulations. Sales of EVs rose sharply in the summer of 2025 as consumers tried to take advantage of a disappearing consumer tax credit, and then dropped when the tax credit expired at the end of September. Automakers say it's still not clear what demand for EVs will look like without those tax credits.

Trump's policy changes have affected Tesla even more directly, by taking away a key revenue stream. Under previous government policies, automakers who didn't meet requirements for making their vehicles cleaner could buy "credits" from competitors who overperformed on building EVs, in lieu of paying fines. This was a lucrative source of cash for Tesla, and one that is now dwindling away. Tesla typically does not respond to requests for comment, and did not reply to an inquiry for this story.

Globally, meanwhile, EVs are still ascendant. In December, in the European Union, buyers registered more new pure EVs than traditional gasoline vehicles for the first time ever. Hybrids (like the original Prius) remain more popular than either, but that market isn't growing as fast as EVs. In Europe, EV sales increased by more than 50% year-over-year, while those popular hybrids rose only 6%. Traditional gasoline- and diesel-powered car sales dropped by around 20%.

In China, most new vehicles are already electric or plug-in hybrids. And Chinese exports of EVs are rising, taking off in places like Mexico and Brazil. Canada, too, just struck a deal to allow the import of some Chinese-made EVs without hefty tariffs.

In addition to BYD's conspicuous success, the major Chinese automaker Geely has boosted its battery-powered vehicle sales by 90% year over year, while competitor SAIC grew sales by 33%.

Those figures include the sales of plug-in hybrids, making them less of an apples-to-apples comparison to Tesla's pure electric sales — but compared to Tesla's sales decline, the trajectory is clear. Tesla once had the lead in the EV race, but the momentum is now with Chinese manufacturers.

Brand takes a beating

Meanwhile, Tesla has been grappling with an increasingly skeptical — or even hostile — consumer base in the U.S.

Musk's controversial political activities over the last few years have alienated many left-of-center Americans. While he won some fans on the right, so far, Republicans and conservatives remain less likely to buy EVs.

Evan Roth Smith is a pollster who has been tracking consumer sentiment about Tesla and EVs for the Electric Vehicle Intelligence Report. According to his most recent survey of more than 3,000 U.S. consumers, nearly all car brands have an overall positive reputation. Toyota ranks at the top: Nearly half of Americans have a positive view of the Japanese brand, and only 7% have a negative view. For Tesla, in contrast, 27% have a positive view and 37% a negative view — the company has more haters than fans.

Tesla's degree of unpopularity among the general public is very unusual for an automaker, he says: "Most carmakers don't have any sort of political valence or mass controversy attached to them." 

And brand perceptions affect sales.

Even current Tesla owners, who have long been remarkably loyal to the brand, are showing a little more interest in shopping around. LexisNexis Risk Solutions tracks what brands current car owners purchase for their next vehicle; if they stick with the same brand, that's evidence of brand loyalty. In their data, Tesla — which has ranked first or second for industry loyalty in recent years — has slipped to third place in 2025.

The company still enjoys higher loyalty than the industry average. But it's clear that EV buyers have more options now, and even Tesla enthusiasts are more willing to consider them. In 2020, LexisNexis found that among existing Tesla owners who purchased another EV, a remarkable 98% got another Tesla. In 2025, that number dropped to 78%.

Musk's focus is on AI and robots, not cars 

Musk — who was recently granted an extraordinary pay package worth up to a trillion dollars, contingent on meeting lofty goals for Tesla's growth and valuation — has maintained for years that Tesla's future lies in autonomous vehicles, artificial intelligence and humanoid robots.

But he has frequently missed his own timelines for those achievements; the driver-assistance software in Tesla vehicles still requires human oversight, and the robotaxi service is only available in small pilot programs in Texas and California, despite Musk projecting service to 50% of America by the end of 2025.

Roth Smith's polling has found that this continued focus on autonomy and robotaxis is not helping Tesla win over public opinion. The "Full Self-Driving (Supervised)" software that allows Tesla vehicles to steer themselves — with human oversight — is central to Musk's vision for the company. Roth Smith's survey found that only 14% of respondents said FSD made them more likely to buy a Tesla; 34% said it made them less likely.

And out of more than 20 different auto brands that Roth Smith polled consumers about, the only ones besides Tesla to have a net negative view from the public were Cruise, Waymo and Zoox — all autonomous vehicle companies.

"There's a lot of skepticism from consumers over whether this technology is safe for mass deployment yet, whether regulators are up to the task of creating rules of the road for autonomous vehicles," Roth Smith says.

By focusing so much on autonomy, Roth Smith argues, Musk has associated Teslas with these controversial robotaxis. "They now are perceived like a much more controversial, much more polarizing type of technology," he says.
Copyright 2026 NPR

This story was originally published by The LA Local on Jan. 28, 2026.

The hottest concert in Koreatown this past weekend may have been an impromptu, after-hours, one-man show at a closed shopping mall.

As the clock approached 10 p.m. last Friday, City Center on Sixth was bustling.

Scores of people — along with their families, friends and pets — flooded into the three-story building for a “uniquely LA” experience.

The crowds didn’t gather for Korean eats at H Mart. They came to catch viral saxophonist Nathanial Young.

Sandwiched between a post office and a pharmacy on the ground floor of City Center, Young performed an hour of original music for free to hundreds of people packed around three levels of atriums dotted with blind box stores and skincare shops.

Hundreds gathered at City Center mall in Koreatown to see Nathanial Young, Jan. 25, 2026.

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Andrew Lopez

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The LA Local

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A 27-year-old Los Angeles resident, Young is no stranger to performing in spaces uncommon for jazz musicians — tunnels in Norway, the foot of Teotihuacán’s Pyramid of the Sun in Mexico, deserted parking structures and empty churches across LA.

He’s racked up millions of views on his social media videos. As his Instagram handle @NathanialPOV suggests, his posts are often recorded from the perspective of the built-in camera in his Ray-Ban Meta glasses.

Young typically announces upcoming performances to his combined 1.1 million social media followers a day or two — and sometimes just hours — beforehand.

For the City Center performance, the announcement drew people from around Los Angeles County, including Will Baker, who told The LA Local he made the drive from North Hollywood.

Before the show began, Baker, 25, leaned on the banister of the mall’s third floor, peering down at a lone microphone stand on the ground floor surrounded by a growing crowd.

“I think it’s awesome that the mall is letting him do this and letting him get a crowd in here and perform for it,” Baker said. “It’s such a cool way to use spaces because we have so many spaces like this in cities all over the place that’d be so fun to hear musicians play in — and they should do it more.”

Hundreds gathered at City Center mall in Koreatown to see Nathanial Young, Jan. 25, 2026.

(

Andrew Lopez

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The LA Local

)

Hundreds gathered at City Center mall in Koreatown to see Nathanial Young, Jan. 25, 2026. (Andrew Lopez / For The LA Local) Young began his set promptly at 10 p.m., without an introduction or opening act.

He quickly commanded the boisterous crowd of hundreds around him, quieting them with the croons of his saxophone.

Many listeners sat with their eyes closed, allowing the notes to overtake their senses.

For Geraldine Lonsdale and her friends Nicole Carre and Paulina Paredes, the soulful tones of Young’s sax drew the trio of Koreatown residents into the mall after grabbing dinner and drinks nearby.

“We couldn’t see him because everyone’s so tall… so we went up the escalator and were like, ‘Okay, this is cool.’ But then we’re like, ‘Is he famous?’” Lonsdale laughed.

Paredes said the sound echoing off the walls and glass added a nice touch to an otherwise unassuming mall.

“I feel like this also grants greater access to this type of music because usually, to listen to this kind of music, you have to be at a jazz club or symphony — not at a mall in the middle of K-town,” Carre added.

In a second-floor corner away from the crowds, Edmond Smith of Chatsworth closed his eyes and listened to Young’s last few songs.

The 35-year-old has seen Young and his collaborators perform across LA before — most recently at a church in downtown.

While shopping malls may represent a bygone era of American consumerism, where young people of decades past would congregate, Smith told The LA Local that Friday night’s performance reminded him of the power of community engagement in such a setting.

“It’s wonderful to see live music, and it’s even more beautiful to see everybody participating in that space that we can all share and experience together,” Smith said.

Temperatures are on the rise these next few days and breezy Santa Ana winds are back, triggering wind advisories for some L.A. County mountains.

The warming spreads from the coasts to valleys to the low desert where temperatures will reach the mid-70s up to the low 80s. Downtown Los Angeles, for example, will reach up to 82 degrees.

The Antelope Valley, meanwhile, will stay cooler with max temperatures from 64 to 67 degrees.

And there's a wind advisory out for the Santa Susana, West San Gabriel and the Highway 14 corridor, where wind gusts could reach up to 50 mph. Those conditions are expected to last until 2 p.m.

The U.S. Senate has until Friday night to approve a package of funding measures or else risk another government shutdown. That package includes funding for child care subsidies, Head Start, and other services for young kids.

Senate Democrats have said they oppose the spending measure because it also includes funding the Department of Homeland Security. They want new restrictions on immigration enforcement, and to split it off from the other funding bills in the package in the wake of the killing of Alex Pretti by federal officers.

In addition to Head Start and child care, the bills in the six-part package include funding for infant and early childhood mental health, maternal health, and home-heating assistance,

“There is no reason that funding for children, for babies, for meeting their very basic needs should be contingent on whether or not ICE gets funding,” said Melissa Boteach, the chief policy officer at Zero to Three, an advocacy organization for babies and young kids. “[Young kids] are in the most rapid stage of brain development. They have immediate needs that need to be met.”

Head Start disruption: What could happen?

The last government shutdown in the fall lasted 43 days, and several Head Start programs in California nearly closed; at least one temporarily shut its doors. Boteach said there may be a few centers that are immediately affected, and others later on if a shutdown drags on, depending on when the center’s grant cycles starts.

Those most at risk are programs that have a Feb. 1 start date, said Melanee Cottrill, executive director of Head Start California, of which she estimated there are around 6-10.

Head Start is a federally-funded program that provides early education and other services to children in low-income families. “ For many of these children, these are also the most nutritious meals that they get every day [at Head Start],” Cottrill said.

“It's not guaranteed that they'll close their doors if there is a government shutdown. It really depends on whether they have other funding sources,” she added.

Federal funding for childcare subsidies for low-income children (which is administered through the state) is also part of the funding package. Earlier this month, President Trump said he would freeze that funding to California, though that action has been tied up in court.

“There's already been a good deal of instability in these programs and for families who rely on them and are just hopeful that the Congress can finish this off and, uh, be able to move forward,” said Donna Sneeringer, president of the Child Care Resource Center, which runs Head Starts and child care subsidy programs in the Los Angeles area.

“[Parents] feel very insecure — these temporary pauses… the family's lives don't pause,” said Mary Ignatius, who heads Parent Voices. “ Real harm happens to the child care providers, the families, and the children who cannot afford any delays."