Revenue of $28.05 billion beat the $27.88 billion LSEG average forecast, though it was slightly below the $28.10 billion of Q3 2025.
Tesla delivered 486,532 vehicles, down 2% year on year and above expectations of about 461,100, while production was 464,391 units.
Operating margin fell to 2.6% from 5.8%, operating expenses rose 39% to $4.8 billion, and free cash flow dropped 62% to $1.5 billion.
Musk confirmed on 20 October that special committees at both companies are examining a possible combination.
Tesla reported third-quarter results on Wednesday, 21 October, after the US stock market closed. Revenue beat expectations, but profit fell sharply and deliveries shrank compared with a year earlier. The results came a day after Elon Musk confirmed a possible combination with SpaceX, another company he runs.
Tesla booked $28.05 billion in revenue for the quarter ending 30 September, above the $27.88 billion average analyst forecast compiled by LSEG. That was slightly below the $28.10 billion recorded in the same quarter of 2025, so revenue was broadly flat year on year. Automotive revenue fell 3% to $20.6 billion, while services and other revenue, which includes parts and Supercharger use, rose by a third to $4.6 billion. Solar and battery storage revenue is reported inconsistently: one breakdown puts that line at $2.9 billion, down 16%, while The Independent described energy storage sales as expanding.
Data from the article text
Tesla delivered 486,532 vehicles, a 2% decline from a year earlier but above the about 461,100 that Wall Street expected. Production reached 464,391, so sales exceeded output for a second consecutive quarter, cutting inventory by more than 22,000 units. Model 3 and Model Y accounted for 478,237 units, or 98% of the total. Other models, including the Cybertruck, delivered 8,295 vehicles, down from 12,364 in the second quarter. Deliveries in the same quarter of 2025 had jumped 7.4% as buyers rushed to claim a $7,500 US tax credit before it expired at the end of September 2025, according to RP Online, which makes the year-earlier comparison harder.
Data from the article text
Net profit attributable to Tesla was $804 million, down 42% year on year, according to Europa Press, while Ars Technica put net profit at $787 million, down 43%. Adjusted Ebitda fell 8% to $3.9 billion, and the margin was 13.9%, 1.14 percentage points lower. Operating expenses rose 39% to $4.8 billion, cutting the operating margin to 2.6% from 5.8% a year earlier. Capital expenditure climbed 110% to $4.7 billion, and free cash flow dropped 62% to $1.5 billion. Income from regulatory credits sold to other automakers fell to $113 million from $417 million. Tesla's investor letter cited lower average selling prices, fewer cars sold, smaller credit income and the decline in energy storage for its flat revenue, while Independent reporting linked the margin pressure to investment in artificial intelligence and robotaxis.
Musk confirmed on Tuesday, 20 October, that both Tesla and SpaceX had appointed special committees to examine a possible deal. Speaking on a SpaceX earnings call that day, he said:
“This is definitely kind of a question where I feel like I'm tap dancing through a minefield, but I do think there's a lot of merit to combining the companies.”
Musk has said he wants to point Tesla toward self-driving robotaxis and humanoid robots, according to RP Online, but car sales still provide most of the company's income. The timeline below traces the quarter's close, Musk's confirmation and the publication of the results.
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Deliveries of 486,532 vehicles also beat Wall Street expectations, though they fell 2% from a year earlier and Tesla's operating margin dropped to 2.6%.
AI text based on reports by europa press, Ars Technica, RP Online and other publishers. Published .