Tesla Profit Misses Target Despite Record Q3 Sales Surge
Revenue Hits $28.1 Billion, Outpacing Expectations
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Tesla Inc.’s third-quarter profit fell short of Wall Street’s expectations despite record electric vehicle sales, a sign of the pressure automakers are facing from shifting federal policies and rising costs.
Adjusted earnings were 50 cents per share in the period, the company said Oct. 22 in a statement. Analysts had expected 54 cents on average in estimates compiled by Bloomberg. Revenue was $28.1 billion, outpacing expectations.
The shares slipped 2% at 4:30 p.m. in extended trading in New York.
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The company reiterated language from the previous quarter that it’s “difficult to measure” how shifting global trade and fiscal policies would impact its businesses and operations. Tesla sees results hinging on the broader economic environment as well as its speed in accelerating autonomy efforts and ramping up production for key products.
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Tesla warned it still faces “near-term uncertainty from shifting trade, tariff and fiscal policy,” but it’s investing in future business lines, including robotics. Analysts surveyed by Bloomberg expect Tesla to report a second year in a row of declining vehicle deliveries.
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Earlier this month, Tesla reported record third-quarter sales as customers rushed to take advantage of a $7,500 U.S. tax credit for EV purchases that expired Sept. 30, delivering a temporary boost to the company’s core automotive business.
Tesla reported $417 million in revenue from regulatory credits it receives from other automakers that exceed emissions standards — only slightly below the previous quarter’s amount. Policy changes under the Trump administration have reduced demand for the credits. Tesla has said it anticipated a decline in that business.
The release offered limited updates on key areas such as Tesla’s robotaxi business, which launched in Austin in June. The company also operates a rideshare service in the Bay Area, and it didn’t give an update on when it expects to run that business fully autonomously.
The results underscored the significant cost increases automakers are grappling with in an environment of import tariffs and inflation. Tesla’s operating expenses soared 50% to $3.4 billion in the quarter.
Free cash flow was nearly $4 billion, up significantly from the previous year and well above the average analyst estimate of $1.25 billion.
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