Tesla achieved record quarterly revenue but disappointed investors with lower-than-expected profits, as tariffs, fading regulatory credits, and growing R&D spending weighed on margins. The company reported $28.1 billion in revenue for the third quarter, beating forecasts, while profit per share came in at 50 cents, short of the 55-cent consensus.
The EV maker’s gross margin hit 18%, with automotive margins at 15.4%, slightly below expectations. CFO Vaibhav Taneja cited $400 million in tariff costs and rising research expenditures tied to AI, robotics, and upcoming product lines. Income from regulatory credits fell to $417 million, down sharply from a year ago.
To boost demand after the expiration of key tax credits, Tesla introduced cheaper “Standard” models of the Model 3 and Model Y. CEO Elon Musk highlighted progress on the company’s next-generation projects, including the Cybercab robotaxi, Semi truck, Megapack 3, and the humanoid robot Optimus — all slated for production by 2026.
While Wall Street expects deliveries to dip in 2025, many investors remain confident in Musk’s long-term AI and robotics vision. Tesla’s stock, however, slid 4% after the report.
