Tesla turns to surprising partner for critical new hardware

Depending on how far you zoom in or out of Tesla's stock chart, the company is either a great investment or a giant headache. But Tesla just announced a new partnership that it hopes will power the company's future and fulfill its trillion-dollar promise.

Over the past 12 months, Tesla shares are up only about 3.4%, according to Yahoo Finance. Over the past six months, they are up more than 42%. Over the past month, they're down nearly 7%. Over the past five sessions, they're up nearly 2%.

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Tesla Q4 delivery data

• Q4 Model 3 and Y deliveries: 406,585
• Q4 all other models deliveries: 11,642
• Q4 Model 3/Y production: 422,652
• Q4 all other models production: 11,706

Tesla shares have a history of volatility, but 2025 was an especially tumultuous year. Tesla shares more than halved in value between December 2024 and April 2025, bottoming out at an intraday low of $214.25 on April 7. But since then, they've more than doubled.

If you can stomach all of that volatility, Tesla is definitely the investment for you.

However, Tesla just reported its second consecutive year of falling car deliveries. Part of the stock volatility was driven by this, and the fact that Tesla's operating income dropped dramatically in 2025 to $4.86 billion from $7.76 billion in 2024, and its gross profit declined to $16.2 billion from $17.4 billion.

While they acknowledge the company has some issues, analysts at Deutsche Bank are bullish on Tesla due to its Robotaxi and self-driving ambitions.

"While the autos business at Tesla may underperform in 2026, we think more attention is directed towards the company’s robotaxi expansion and efforts at humanoid development,” Deutsche Bank analysts said in a recent note.

“To the extent that the macro regime doesn’t change materially, we think investors will continue to look beyond weakness in the autos business.”

However, the firm also expects “the race for autonomy and embodied AI” to accelerate in 2026.

This week, Tesla made a move to secure its place in that race for autonomy by partnering with Samsung.

Tesla taps Samsung for 5G modem

Korean electronics giant Samsung is mostly known for its phones, computers, and televisions, but the company is now reportedly in business with Tesla to build the technology that will make its autonomous driving ambitions viable.

Samsung will begin supplying Tesla with 5G automotive modems, according to a report from South Korea's TheElec, just two years after Samsung Electronics began development of the technology.

Related: Tesla's troubles are mounting in a few key regions

Samsung has decades of experience making modums for smartphones, but automotive modems have different durability requirements. They need to be able to withstand extreme temperatures and vibrations and have a guaranteed lifespan of more than 10 years.

Tesla has been using Qualcomm modems, but the company is trying to reduce its dependence on Qualcomm in hoped of reorganizing its supply chain around the U.S. and Korea instead of Taiwan and China, according to TheElec.

In July 2025, Tesla and Samsung announced at $16.5 billion deal for Samsung to provide Tesla with its next-generation AI6 chip. Though production of that chip is still years away, the 5G modems that will start appearing in Tesla vehicles later this year will eventually be powered by those chips.

Both the AI6 chips and the modem will play a big part in Tesla's autonomous future.

The initial batch of modems will be used in Tesla Robotaxis operating in Austin, Texas, according to the report, with the plan to expand to general vehicles later.

Tesla needs to reverse course after disappointing year

Tesla delivered a little more than 418,000 vehicles in the fourth quarter, bringing its full-year total in 2025 to 1.64 million.

That is an 8.6% year-over-year decline from the 1.79 million vehicles it delivered in 2024. It's also the second consecutive year of falling deliveries after the company's record-setting 1.81 million vehicles delivered in 2023.

Related: Ford debuts plan to leapfrog key Tesla tech

World’s top EV markets in 2024

• China: 6.4 million EVs sold 
• Europe: 2.2 million EVs sold
• U.S.: 1.2 million EVs sold
• Rest of world: 1 million EVs sold
  Source: International Energy Agency

CEO Elon Musk will undoubtedly have something to say about the year’s results during the company’s earnings call after the market close on Wednesday, January 28, and investors will be on the call.

While the company does not break out its sales by region, there is evidence that the company’s decline has been driven by rough spots in China and Europe, the two largest electric vehicle markets in the world.

Tesla’s downturn in Europe has been a long time coming, and it doesn’t seem to be letting up anytime soon.

The company reported falling sales across the European region for most of 2025, driven by numerous issues, including CEO Elon Musk’s increased involvement in politics.

While Musk promised investors that he would spend more time at Tesla HQ in Austin once his time in D.C. ended, he has instead flirted with starting his own political party and spends much of his social media bandwidth commenting on government concerns. 

Musk has publicly endorsed the AfD, a German right-wing party that some view as extremist, and he was accused of doing a Nazi salute on stage.

Nazis are still frowned upon in Europe, and Musk's flirtation with fascism has cost him on the continent.

UK registrations of Tesla vehicles dropped by more than 29% in December to 6,323, according to data from New AutoMotive, cited by Reuters.

Tesla’s sales in Europe declined by nearly 40% from January to April compared to the same period last year. In June, sales dropped another 39%. According to the European Automobile Manufacturers Association, Tesla’s 2025 first-half sales were down 44% in Europe.

Related: Elon Musk must deliver on Tesla promise in 2026, Deutsche Bank says