Tesla’s Profits Are Down
Profit per vehicle is what it sounds like: essentially how much money an automaker makes per unit sold. Tesla‘s still the most profitable brand per vehicle sold for the fifth straight year, but recent developments could see it abdicate its throne in the near future.
The gap between first and second place is narrowing. Following closely behind Tesla in profits per unit is Toyota, at about $40 per unit. As to why this is happening, U.S. Tariffs, slowing EV demand, and the removal of EV tax credits are some of the key factors.
Market “Terraforming”
Nikkei Asia has the story, reporting that Tesla’s still number one in per-unit profitability at $2,140 (348,000 JPY) per vehicle, but that profitability is down 40% from the 2024 figure.
The U.S. Government removed EV tax credits, disincentivizing EV purchases. With that, demand for battery electric vehicles is expected to shrink, and that’s also on top of a 40% drop in carbon credit sales as U.S. emissions rules eased. That being said, these developments
On top of all that, demand for EVs slowed globally in 2025, with certain brands dialing back EV investments altogether. For the 2026 metrics, we can expect that number to shrink further due to the conflict in the Middle East, which led to supply chain disruptions, rising raw material costs, and reduced factory utilization.
Toyota’s Closing In
In a close second place for the 2025 metrics from Nikkei, the source reported that Toyota finished in second with about $2,078 of profit per unit sold (341,000 JPY). That achievement in 2025 isn’t without its drawbacks, as the Japanese brand experienced a 20% drop in profitability compared with the previous year (2024).
Toyota’s eggs aren’t all in one basket (powertrain). The brand remains a force to be reckoned with in hybrids, with the RAV4 facing problems due to overwhelming demand. Toyota still maintains strong demand in the hybrid space, which helped cushion the impact of the EV slowdown in 2025.
In 2026, we’re still seeing strong demand for Toyota hybrids throughout the year, with the brand shifting production of the Highlander EV to next year while keeping the ICE and HEV versions in the lineup for customers to continue buying.
What kept Toyota from usurping Tesla’s profitability throne was the tariffs it faced. According to the source, the brand lost over 8.5 million U.S. dollars in operating profit (1.38 trillion JPY).
Toyota
Other Brands and the Future
Nikkei Asia also covered a few other brands in its report, notably BYD, despite pulling away from Tesla in terms of unit sales, which finished third in fiscal 2025. The reason BYD didn’t climb higher was the reduction in tax incentives from the Chinese government for new energy vehicles.
Meanwhile, it wasn’t all profits for the rest of the industry, as Stellantis and Ford experienced losses per vehicle sold in fiscal 2025, a stark contrast to 2024, when the brands were profitable.
Looking to 2026, we can expect company profitability to decline further. Factors include ongoing U.S. Tariffs, supply chain disruptions due to the Middle East conflict, rising raw material costs, and production cuts that are reducing factory utilization, all of which are set to affect everyone’s bottom line.
