Tesla’s third-quarter results gave investors a mixed picture: adjusted earnings exceeded expectations, but revenue was nearly flat and net income fell sharply as the company continued investing in artificial intelligence, autonomy and robotics. Tesla reported $787 million in net income, or 22 cents per share, down 44% from a year earlier. Adjusted earnings were 48 cents per share, three cents above analysts’ expectations, while revenue slipped slightly below the roughly $28. 2 billion forecast.
Analysts focused on an automotive margin rate that came in well above consensus. RBC Capital Markets analyst Tom Narayan attributed the improvement to vehicle-region and product mix, partly offset by lower average selling prices, and identified increased subscriptions to Tesla’s Full Self-Driving system as a likely contributor. Dhierin Bechai said the quarter’s strong free cash flow reflected lower-than-expected capital spending and favorable working-capital effects, while warning that the combination may not recur and that higher research and development costs could continue pressuring margins.
The quarter also sharpened attention on Tesla’s shift beyond conventional vehicle sales. Cybercab robotaxi rides had begun in Austin, the company said it had started initial Optimus production at Fremont, and the Tesla Semi had entered production. It also disclosed a vehicle-order backlog described as its largest in four years, with limited battery availability identified as a major factor.
Dan Ives said investors would seek details on robotaxi fleet growth, the Cybercab ramp, battery-pack capacity, FSD subscription growth after the purchase option was removed, Tesla’s 2027 capital-spending path and its $30 billion in debt facilities. He also flagged questions about Optimus Gen 3 timing, the location and cost of the Terafab project, and the pricing and production plan for the Roadster ahead of its planned 2028 launch.
Kenio Fontes said the quarter looked stronger when viewed through Tesla’s operating progress than through its stock valuation. He pointed to improving gross margin, continued FSD expansion, Austin robotaxi activity and Optimus production, but said higher research spending had weighed on operating margin and left short-term shareholder value under pressure. The earnings discussion also came as special committees at Tesla and SpaceX considered a possible combination, though Elon Musk said significant obstacles remained.