Tesla, Inc. released its fourth-quarter and full-year 2025 earnings on January 28, 2026, showing a mixed financial picture. Revenue exceeded market expectations slightly. However, profits dropped due to weaker vehicle demand and tighter margins.

For the fourth quarter, Tesla reported revenue of about $24.9 billion, a small beat versus analyst forecasts. However, this figure was around 3% lower year over year, reflecting slower growth in global electric vehicle (EV) deliveries. Adjusted earnings per share reached $0.50, down by nearly double digits compared with the same quarter last year.

For the full year, Tesla posted total revenue of around $94.8 billion, marking its first annual revenue decline. Sales fell by about 3% year over year, mainly due to price cuts, higher competition, and softer demand in key markets. Net income dropped, and operating margins got tighter. Production costs and pricing pressure hurt the results.

Despite these challenges, Tesla shares moved higher by 3% in after-hours trading. Investors seemed less worried about short-term struggles. Instead, they focused on the company’s long-term strategy, which goes far beyond just vehicle sales.

Strategic Shifts Beyond EVs: Vision for AI, Robotaxis, and Optimus

During the earnings call, Tesla Chief Executive Officer, Elon Musk, highlighted the company’s shift into a technology and energy platform. He noted several initiatives that are expected to shape Tesla’s next phase of growth.

One major focus is autonomous mobility. Tesla continues to prepare for the launch of its Cybercab robotaxi, which the company positions as a future driver of high-margin, recurring revenue. Musk also talked about Optimus, Tesla’s humanoid robot. It’s still in early development, but key to their long-term vision.

Musk stated:

“As we increase vehicle autonomy and begin to produce Optimus robots at scale, we are making very big investments. This is going to be a very big CapEx year, as we will get into. That is deliberate because we are making big investments for an epic future. I think all these investments make a lot of sense…But it’s a lot of things. Major investments in batteries and the entire supply chain of batteries. We are also going to be significant manufacturers of solar cells, and we are making massive investments in AI chips.”

Artificial intelligence also featured prominently. Tesla confirmed a $2 billion investment in xAI, Musk’s artificial intelligence venture. The investment reflects the company’s growing emphasis on AI systems that support autonomy, robotics, and advanced software applications.

• SEE MORE: Tesla Shifts From EVs to AI: Musk Says Robots Will be 80% of Company Value

At the same time, Tesla’s energy generation and storage business remains a key growth area. The company is expanding its battery storage systems. These systems thrive on rising electricity demand, grid instability, and the push for renewable energy. While this segment still represents a smaller share of total revenue, it provides diversification at a time when automotive sales face pressure.

These initiatives show Tesla’s plan to rely less on vehicle sales. The EV giant aims to create new revenue streams to support long-term profitability.

Carbon Credit Revenue: From Record Highs to Slower Growth

Tesla’s regulatory or carbon credit revenue fell in 2025 from 2024. However, quarterly data reveals significant changes throughout the year that impacted margins.

In Q1 2025, carbon credit sales fell to $595 million, a 14% decline quarter over quarter. This drop reduced margin support at a time when vehicle pricing pressure remained high.

The decline accelerated in Q2 2025, when Tesla reported $439 million, down 26% from Q1. The weaker credit contribution coincided with continued margin compression in the automotive segment.

In Q3 2025, credit revenue slipped further to $417 million, a 5% sequential decline. This marked the lowest quarterly level of the year. With fewer credits available, Tesla relied more heavily on vehicle sales and cost controls to protect margins.

In Q4 2025, regulatory credit revenue rebounded to $542 million, a 30% increase from Q3. This recovery provided year-end margin support and helped offset weaker automotive profitability. The rebound suggests higher compliance-driven demand late in the year.

Even with the Q4 boost, Tesla’s total regulatory credit revenue for 2025 was still far below 2024, down 28%. That year, Tesla made a record $2.76 billion from credit sales. The 2025 pattern shows lower volumes and greater volatility.

Tesla’s regulatory credits are sold to other automakers that do not meet emissions requirements. These buyers are typically large, global manufacturers such as Stellantis, Toyota, Ford, Mazda, and Subaru.

The EV maker has confirmed its role in carbon credit pooling. This means it shares emissions credits with other automakers. This helps them meet regional rules, especially in Europe. Tesla sells extra zero-emission credits to partner automakers under pooling agreements. In return, they receive payments. 

The 2025 data shows that carbon credits are still high-margin and important. However, they no longer provide steady support each quarter. Their effect on operating margin now relies on timing, regulatory cycles, and year-end compliance needs, not steady growth.

A Shifting Financial Landscape: What Earnings Say About Tesla’s Model

Tesla’s latest earnings underline a clear shift in its financial structure. In the past, carbon credit sales helped offset lower vehicle margins and protected profitability. As those credits decline, Tesla must rely more heavily on its core operations and emerging businesses.

The automotive segment continues to face pressure from competition, pricing strategies, and uneven global demand. While Tesla remains one of the world’s largest EV producers, the market has matured, and growth rates have slowed.

At the same time, new business lines such as energy storage, software, autonomy, and AI offer potential upside. Yet, many of these segments require significant investment and may take years to deliver consistent profits.

• MUST READ: Tesla Tests Driverless Robotaxis in Austin While Analysts Predict 1 Million Units by 2035, Sending Stocks Up

From a financial perspective, Tesla’s earnings report highlights a transition phase. Short-term results reflect margin compression and revenue contraction. Long-term performance hinges on new technologies. They must scale up and produce a steady cash flow, especially as regulatory credit income decreases.

Driving Sustainability: EVs, Batteries, and Tesla’s Role in Net-Zero

Sustainability is a key part of Tesla’s identity and long‑term plan. The company says its mission is to accelerate the world’s shift to clean energy. It focuses on EVs, energy storage, and renewable integration — all aimed at cutting greenhouse gas emissions.

Tesla’s EVs help reduce emissions by replacing internal combustion engine cars. According to Tesla’s 2024 impact figures, customers avoided around 35 million metric tons of CO₂ equivalent in 2024 by using Tesla vehicles, solar products, and energy storage. This was a large jump from prior years.

Carbon credits form part of this sustainability ecosystem. By selling credits, Tesla helps other automakers comply with emissions regulations, indirectly supporting lower sector-wide emissions. However, as more manufacturers electrify their fleets, the need for such credits naturally declines.

Battery storage is another part of Tesla’s sustainability work. In 2025, Tesla deployed the highest energy storage, which supports clean energy grids and renewable expansion. Its Powerwall and Megapack units help balance power systems and reduce reliance on fossil fuels.

Tesla has not publicly stated a formal corporate net‑zero target year as some peers do. However, it continues to report on lifecycle emissions, energy efficiency, and avoided emissions in its impact reporting. The company is also working to improve manufacturing, recycling, and supply chain transparency.

As the EV market evolves, Tesla’s role may shift. Carbon credit sales are likely to shrink as more automakers electrify their fleets, and fewer credits are needed. Instead, Tesla’s direct emissions reductions — through cleaner vehicles, grid‑scale storage, AI, and energy products — could become more important in helping global decarbonization. 

• READ MORE: Tesla at a Crossroads: Sales Slump Meets Regulatory Headwinds But Stock Rises, Why?

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In Cape Town, a carbon credit issuance from restored grasslands has quietly set a global precedent. The Grassland Restoration and Stewardship in South Africa (GRASS) project has issued 266,255 verified carbon units, becoming the first project worldwide to earn the Climate, Community and Biodiversity (CCB) label under Verra’s updated VM0042 methodology.

Developed by carbon project specialist TASC, the initiative focuses on degraded grasslands managed largely by communal livestock farmers. These landscapes, often overlooked by investors, now sit at the centre of a high-integrity carbon model that could shape how future African projects are designed and judged.

South Africa’s Grasslands Face a Quiet Crisis

Grasslands cover vast areas of South Africa. Around 34 million hectares support livestock farming, forming one of the country’s most important rural economies. Yet decades of overgrazing, unmanaged fires, and weak institutional support have taken a heavy toll. Roughly a third of these grasslands are now severely degraded.

Climate change has intensified the pressure. Droughts are more frequent. Rainfall is less predictable. Soil health has declined. Productivity has suffered. Communal farmers, who collectively own about half of South Africa’s livestock, remain marginalised in formal markets. Despite their scale, they supply only around 9 percent of national meat output.

This gap reflects structural barriers rather than a lack of land or labour. Limited access to training, veterinary services, finance, and consistent routes to market has locked many farmers out of value chains. GRASS was designed to work within these realities, not around them.

How the GRASS Project Works

GRASS is built around improved grassland and livestock management. The project applies regenerative practices such as adaptive grazing, better fire management, and active monitoring of soil and vegetation. These changes help rebuild grass cover, increase soil carbon, and improve the resilience of rangelands.

The project operates as a group model. Multiple Project Activity Instances, or PAIs, can join under a single framework. The first PAI focuses on communal livestock farming systems, where land tenure is complex and collective decision-making is essential. More recently, TASC expanded the project to include private, commercial farmers.

Significantly, GRASS was the first project registered globally under Verra’s VM0042 methodology, which is specifically designed for improved agricultural land management. This methodology requires detailed soil carbon measurement and includes safeguards to prevent emissions leakage. It reflects the latest thinking on how to quantify carbon outcomes from land-use change credibly.

A Landmark VCU Issuance Under Stricter Rules

During its first monitoring period from 2021 to 2023, GRASS generated 266,255 verified carbon units across more than 95,000 hectares of communal rangeland. The area overlaps with nine key biodiversity zones, including parts of the Maputaland-Pondoland-Albany hotspot.

What makes this issuance special is the CCB label. It confirms that the project delivers measurable climate benefits while also supporting communities and biodiversity. Under the updated VM0042 rules, GRASS is the first project to earn this combined certification.

For buyers, this matters. They want credits that are real, long-lasting, and socially responsible. GRASS meets these standards through strong monitoring and transparent governance.

Community Livelihoods at the Centre

During the first monitoring period, about 4,000 communal farmers joined GRASS and helped manage the land that generated the initial credits. Nearly 300 people also gained work in ecological monitoring, grazing support, and fire management, which matters in areas with few formal jobs.

Carbon revenues flow through a community trust, ensuring income reaches local communities instead of being captured by developers. While carbon payments alone are not transformative, they help cover the costs of improved land management.

Market access has driven much of the project’s early impact. Through a partnership with Meat Naturally Africa, farmers received training and gained access to mobile auctions and abattoirs. These linkages generated about ZAR56.4 million (roughly $3.35 million) in additional revenue from livestock and wool sales, helping households stabilize income amid rising climate risk.

Employment, Skills, and Local Resilience

As GRASS expanded, it created around 900 jobs across communal rangelands, with nearly one-third held by women. Roles include ecological rangers, grazing coordinators, and data collectors.

The project builds technical skills locally, offering training in fire management and invasive species control. This helps protect ecosystems and reduces the need for outside contractors.

GRASS also works through existing communal governance structures. By strengthening local decision-making and ensuring transparent benefit sharing, it lowers the risk of conflict—an issue that often affects land-based carbon projects in Africa.

• READ MORE: Microsoft Buys 2 Million Tons of Carbon from Rubicon Carbon’s Uganda Forestry Project

TASC is Scaling Grassland Restoration Without Losing Integrity

Today, GRASS spans about 950,000 hectares of communal and private rangeland, placing it among the largest grassland restoration initiatives globally. The communal component alone covers more than 600,000 hectares and is expected to expand to one million hectares over time.

TASC plans to scale the project to two million hectares by 2030. At that level, GRASS could sequester or avoid nearly two million tonnes of carbon dioxide equivalent each year. Over its 100-year commitment period, the project targets the mitigation of around 14 million tonnes within its first 30 years.

These figures are modest compared to national emissions. However, they highlight the cumulative potential of land-use interventions when applied consistently and at scale. They also show that community-managed landscapes can meet some of the world’s most demanding carbon standards.

What This Means for African Carbon Markets

Many African countries see carbon markets as a source of climate finance. Yet progress has been uneven. Concerns over land rights, benefit sharing, and long-term stewardship have slowed investment. Some projects have promised more than they delivered, eroding trust.

The South African grasslands example offers a different path. It shows that community-led projects can achieve high-integrity certification while delivering measurable economic returns locally. It also demonstrates that rigorous methodologies and social safeguards need not limit scale.

As scrutiny of voluntary carbon markets intensifies, examples like GRASS may shape future expectations. Buyers, regulators, and communities alike are shifting their focus from promises to outcomes. Projects that cannot show real climate, social, and biodiversity benefits may struggle to find support.

In that context, GRASS stands out. Not as a silver bullet, but as proof that carbon finance, when designed carefully, can restore ecosystems, strengthen rural livelihoods, and deliver credible climate mitigation at the same time.

• READ MORE: Unlocking Zambia’s Carbon Market: Miombo Woodland Restoration to Remove 2M Tonnes of CO₂ Annually 

The post Why South Africa’s Verra-Certified Grassland Carbon Credits Matter for Voluntary Markets appeared first on Carbon Credits.

A Canadian carbon management company, DevvStream Corp., and a United Arab Emirates (UAE) investment platform have joined forces to launch a new climate investment vehicle. The goal of the partnership is to build a US$100 million fund by the end of 2027 to invest in environmental assets. These include carbon solutions, decarbonization, and technologies that support the global energy transition.

The new vehicle, called the Fayafi x DevvStream Investment Platform, seeks to bring in capital. It will help scale impactful projects in various carbon and climate initiatives. DevvStream’s carbon asset know-how and Fayafi’s financial strength will team up. They will build a global investment engine for environmental infrastructure and carbon solutions.

Inside the Fayafi–DevvStream Investment Platform

DevvStream and Fayafi Investment Holding Limited, based in the Dubai International Financial Centre (DIFC), have signed an investment agreement. They will create a jointly governed special purpose vehicle (SPV).

The SPV’s main objective is to pursue scalable, high-impact decarbonization opportunities. It is targeted to reach $100 million in capital commitments by 2027, though this remains a non-binding target rather than a guarantee.

The vehicle will focus on several areas, including:

• Environmental infrastructure,
• Carbon credit solutions and monetization,
• Climate-related technologies

Fayafi is expected to hold 80% of the economic interest in the SPV, while DevvStream will hold 20%. Most profits from investments and carbon credit revenues are expected to go to Fayafi. The rest will be distributed to DevvStream.

An Investment Committee with representatives from both partners will review and approve funding decisions. A Fayafi representative will serve as Chair of this committee. DevvStream will charge a one-time setup fee once the platform is approved. It will also receive ongoing consulting fees based on a percentage of assets used in the fund.

Why This Deal Matters for Carbon Markets

The launch of the Fayafi x DevvStream Investment Platform comes at a time when carbon markets and environmental assets are gaining traction. More companies, governments, and investors want to fund climate solutions. They are looking for options beyond just cutting emissions. Projects related to carbon capture, carbon markets, clean energy, and decarbonization infrastructure are drawing interest from a wider set of financial players.

DevvStream itself specializes in handling, aggregating, and monetizing environmental assets such as carbon credits and renewable energy certificates. This lets the company handle and create climate investments within larger sustainability plans.

Carbon credits are units that represent a reduction or removal of greenhouse gas emissions. They can be bought and sold in voluntary and compliance markets.

Carbon credit demand is set to rise. Companies aim for net-zero targets, and regulators are tightening rules on climate reporting and carbon offsets.

The chart shows the projected global carbon credit market size from 2025 to 2050. The green range shows lower and upper bounds, reaching $50–$250 billion by 2050 (2024 prices). Growth depends on demand: high demand with loose supply drives the market to the upper bound, while low demand with loose supply results in the lower bound.

Another projection says it could reach up to $270 billion by 2050. This prediction of market growth reflects the rising corporate demand for nature-based and technology-based environmental asset solutions. DevvStream and Fayafi are building platforms to tap into this growing market. They focus on linking finance with clear climate results.

• SEE MORE: Carbon Credit Market Heads Toward $270 Billion by 2050 as Quality Reshapes Demand

DevvStream’s Expanding Role in Climate Assets

DevvStream started in 2021. It focuses on carbon management and monetizing environmental assets. The company works across three strategic domains:

1. Carbon offset portfolios: including nature-based, tech-based, and carbon sequestration credits for sale to corporations and governments.
2. Project investment and acquisition: helping to extend its reach into broader environmental markets.
3. Project development services: where it structures and manages eligible climate and sustainability activities in exchange for a percentage of generated credits.

This model allows DevvStream to provide full support, from project development to monetization. By teaming up with Fayafi to scale investments, the company can boost its opportunities and increase steady revenue from advisory and asset management roles.

DevvStream has also been active in other strategic moves. In late 2025, it teamed up with Southern Energy Renewables and agreed to merge into a Nasdaq-listed company. This new company will focus on producing low-cost, carbon-negative fuels like sustainable aviation fuel (SAF) and green methanol.

The plan features a $402 million bond allocation for a biomass-to-fuel facility in Louisiana. This move will boost the company’s role in carbon-negative industries.

Market Forces Powering Climate Capital

Many market trends are shaping the launch of climate investment vehicles that DevvStream and Fayafi are creating. 

Corporate net-zero commitments are a major driver. Many multinational companies now aim to reach net-zero greenhouse gas emissions by 2050 or sooner. To meet these goals, they mix direct emissions cuts with clean energy buying. They also purchase environmental assets like carbon credits. This corporate demand boosts liquidity. It also supports investment platforms that create and manage climate-aligned assets.

Policy changes and ESG reporting standards are also pushing growth. Governments and regulators in developed and emerging markets are improving climate reporting rules. This trend increases the demand for verified environmental assets that help firms demonstrate progress toward emissions targets.

Another key trend is the rise of carbon markets themselves. Both compliance markets (such as the EU Emissions Trading System) and voluntary markets are expanding. Voluntary markets have challenges with pricing and standardization.

Still, they are vital for companies looking to offset and eliminate residual emissions. Research shows that the ecosystem for environmental asset investment is growing. This growth opens doors for financial products that blend climate impact with returns.

Climate Finance Market: Size, Trends, and Outlook

Global climate finance continues to expand, but it still falls short of what is needed. In 2024, global climate finance flows reached over $1.8 trillion in 2023 and will surpass $2 trillion in 2024, based on Climate Policy Initiative (CPI) data. Most of this funding goes to clean energy, transport, energy efficiency, and climate-resilient infrastructure. Private investors now provide more than half of total climate finance.

Despite this progress, the funding gap remains large. Analysts estimate that annual climate investment must rise to $5 trillion to $7 trillion by 2030 to meet global climate goals. This means current funding would need to increase several times within the next few years.

Carbon markets form a smaller but growing part of climate finance. Most future growth is expected in emerging markets, where mitigation costs are lower but access to capital is limited. This has increased interest in structured climate investment vehicles.

In this context, initiatives like DevvStream’s joint platform targeting $100 million by 2027 reflect a broader push to channel private capital into scalable carbon mitigation projects and close global climate finance gaps.

What This Deal Means for Climate Finance

The Fayafi x DevvStream Investment Platform will target:

• Environmental infrastructure
• Carbon solutions
• Technologies that support climate goals

This initiative fits with the growing trend in sustainable investing. Corporations, governments, and financial firms are putting more money into environmental assets. They aim to meet net-zero goals. Though achieving a $100 million target is still a forecast, this partnership is a big step in climate finance growth.

• READ MORE: DevvStream Bets $10M on Bitcoin and Solana to Reinvent Carbon Credit Markets

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