Tesla reports $28.1B in Q3 revenue, up 12% YoY, but missed earnings expectations

Tesla pulled in $28.1 billion in revenue for the third quarter of 2025, finally snapping a two-quarter losing streak. That’s a 12% rise compared to the same period last year, when the company made $25.18 billion.

But the market wasn’t thrilled. Earnings missed estimates. Adjusted profit came in at 50 cents per share, short of the 54 cents analysts expected. The stock dropped about 1.5% in after-hours trading.

Tesla’s core auto business raked in $21.2 billion, a 6% increase from $20 billion in Q3 last year. But even with that growth, profits tanked. Net income fell to $1.37 billion, or 39 cents per share, down 37% from the $2.17 billion (or 62 cents) reported last year.

What happened? Two things: cheaper EV prices and a spike in expenses. The company said its operating costs jumped 50%, mostly because of “artificial intelligence and other R&D projects.”

Musk, tariffs, and expired tax credits hit margins

The end of Q3 lined up with the expiration of federal EV tax credits, which were scrapped in President Donald Trump’s new spending package. That deadline created a rush as buyers tried to claim the credit before it vanished. But now the cushion is gone. Sales got pulled into Q3, and that boost may not repeat in Q4.

In July, Elon Musk and Vaibhav Taneja, Tesla’s finance boss, warned shareholders that rising tariffs and the end of the credit would bite into results. That call didn’t age well. The pressure hit Tesla’s regulatory credit revenue, which collapsed 44% to $417 million from $739 million last year.

Things were worse in Europe. Even though total revenue grew, Tesla’s European sales fell. Consumers there aren’t exactly rallying behind Musk—his politics and public behavior are turning off some buyers. Combine that with heavy competition from EV makers like Volkswagen and BYD, and the result is a stalled growth engine overseas.

The share price, which got crushed at the start of 2025, has climbed back and is now up nearly 9% year-to-date. But it’s still underperforming compared to other large-cap tech names and broader indexes.

New products launch as deliveries hit record

Tesla didn’t offer hard numbers for future demand. But in the shareholder update, it said it still plans to start “volume production” of the Cybercab, electric Semi trucks, and the Megapack 3 battery system in 2026. That’s the goal, anyway.

The company also confirmed it’s working on “first generation production lines” for its humanoid robot, Optimus. The electric Semi, first announced in 2017, is still not in full production. While a few have shipped to early customers, Tesla said the manufacturing setup is still “under construction.”

No promises were made about how many cars or batteries it will ship by the end of the year. The company instead said, “It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure, and demand for durable goods and related services.”

Despite the uncertainty, Tesla reported 497,099 vehicle deliveries in Q3—its highest ever—on total production of 447,450. But year-to-date deliveries sit around 1.2 million, which is down 6% from the same period last year.

In early October, Tesla rolled out cheaper versions of its Model Y and Model 3, saying the move makes its products “more accessible to customers in the wake of the expiration of the EV tax credit in the U.S.”

The surprise MVP this quarter was the energy division. Sales there jumped 44% to $3.42 billion. That includes big batteries and solar tech meant to power data centers and facilities. This side of the business is now growing faster than any other, at least for now.

Tesla executives will take questions from analysts during an earnings call set for 5:30 p.m. ET.

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