TSLA Drops As Q3 Earnings Reveal Mixed Bag

Topline

Tesla reported third-quarter earnings Wednesday that fell short of economists’ expectations, the first of the world’s largest firms to post third-quarter earnings, following a historic rise in quarterly deliveries in the lead-up to electric vehicle tax credits expiring.

The automaker earlier reported a record-setting number of vehicle deliveries through the quarter.

Getty Images

Key Facts

Tesla reported $28.09 billion in revenues, well above Wall Street’s forecasts of $26.5 billion, according to FactSet, representing a 24.8% increase from the previous quarter, which suffered from the largest sales decline in more than a decade.

That marks a 12% jump in third-quarter revenue over the previous year after two straight quarterly declines, as automotive revenue rose 6% to $21.2 billion from $20 billion in 2024.

Tesla’s earnings missed analysts’ estimates, however, after recording earnings per share of $0.50 in the third quarter, below projections of $0.56.

A bump in revenues comes after Tesla reported quarterly deliveries of just over 497,000, above the company’s compiled consensus of around 443,079 and analysts’ estimates of 456,000, the largest by Tesla on record.

Tesla’s stock declined more than 1.5% in after-hours trading Wednesday.

What To Watch For

Tesla will host its earnings call at 5:30 p.m. EDT on its investor relations website. Shareholders have voted on questions to ask executives, with the highest-rated questions requesting new details on new car models and updates on Tesla’s robotaxi plans, among others, as of Wednesday afternoon. Cantor Fitzgerald analysts wrote Tuesday that they would focus on updates from Tesla regarding its robotaxi service in Texas and California, as well as production and sales of the new, lower-priced Model 3 and Model Y cars.

Key Background

Tesla’s latest quarter featured declining sales in Europe as competition ramped up among EV alternatives from Volkswagen and BYD. Elon Musk and Vaibhav Taneja, Tesla’s finance chief, suggested last quarter the automaker would additionally struggle as the Trump administration cut federal electric vehicle tax credits in October, ending a program that provided consumers up to $7,500 for purchasing an EV. Musk said he expected Tesla could “have a few rough quarters,” while Taneja noted Tesla may struggle with inventory as President Donald Trump implemented his widespread tariffs on U.S. trade partners. A record-setting delivery tally through its third quarter preceded Tesla’s debut of cheaper alternatives to its Model Y and Model 3 cars earlier this month, the automaker’s first product release in years.

Tangent

A report released earlier this month from the management consulting firm Interbrand ranked Tesla as the 25th-best global brand, behind automakers BMW, Mercedes and Toyota, which ranked No. 6. Tesla ranked No. 12 in 2024, as Interbrand noted the decline for Tesla—referred to by Interbrand as the former “disruptive force in the automotive industry”—was the result of rising EV competition and Musk’s diving into politics. Interbrand added, “A lack of innovation in products and low-cost competitors has led to concerns about Tesla’s ability to sustain high margins.”