Tesla's Revenue Stays Flat as Car Sales Dip, but Profit Beats Estimates

Keypoints:

• Third-quarter revenue was $28.05 billion, roughly flat from $28.24 billion a year earlier
• Adjusted earnings per share were $0.48, above the $0.45 analysts expected
• Automotive revenue fell 3% to $20.56 billion, and energy revenue fell 16% to $2.88 billion
• Operating income dropped 56% to about $0.7 billion, a 2.6% margin
• Free cash flow was $1.53 billion, and Tesla delivered its 10 millionth vehicle

Tesla reported third-quarter results after the market closed on 21 October. Revenue reached $28.05 billion. Analyst estimates ranged from about $27.8 billion to $28.3 billion, so the result was roughly in line. Adjusted earnings per share of $0.48 edged past the $0.45 consensus. The company also said its trailing twelve-month revenue stayed above $100 billion for a second straight quarter.

The car business shrank. Automotive revenue fell 3% to $20.56 billion. Tesla delivered 486,532 vehicles, about 2% fewer than a year earlier but 1.3% more than in the second quarter. Model 3 and Model Y made up 478,237 of them. Other models fell to 8,295 from 15,933 a year ago.

Tesla gave two reasons for the weaker auto numbers. Average selling prices were lower. It also had trouble securing enough battery supply to fill a backlog of orders. Production was 464,391 vehicles, so deliveries exceeded production by roughly 22,000 units and drew down inventory.

Energy was weaker still. Revenue from energy generation and storage fell 16% to $2.88 billion, partly because of tariff-related customer refunds. The company deployed 13.7 gigawatt-hours of storage in the quarter. Lower regulatory credit revenue also weighed on results. Growth in services and other revenue, plus a $0.3 billion boost from currency moves, offset part of the decline.

Profit tells the sharper story. Operating income fell 56% from a year earlier to about $718 million. The operating margin was 2.6%. Free cash flow of $1.53 billion was far better than the negative figure some analysts had modeled.

Investors have been cautious. Tesla shares are down about 14% this year, which trails most large technology stocks. The company has also given no price for its new Roadster, which it plans to produce in 2028.