Tesla reported record third-quarter revenue of $28.1 billion on October 22, 2025, driven by 497,099 vehicle deliveries amid a rush for expiring U.S. EV tax credits. However, net income fell 37% to $1.4 billion, missing analyst expectations due to higher operating expenses and tariffs. CEO Elon Musk emphasized AI and robotics initiatives during the earnings call.
Tesla's third-quarter results, released after market close on October 22, 2025, highlighted a rebound in sales following a challenging start to the year. The company delivered a record 497,099 vehicles, up 7% from the prior year, generating $21.2 billion in automotive revenue. This surge was fueled by U.S. buyers securing the $7,500 federal EV tax credit before its expiration on September 30, 2025, under President Trump's policies. Energy storage deployments also hit a record 12.5 GWh, up 81% year-over-year, contributing to overall revenue growth of 12% to $28.1 billion, exceeding Wall Street estimates of around $26.4 billion.
Despite the top-line strength, profitability weakened. Net income dropped to $1.4 billion from $2.2 billion a year earlier, with adjusted earnings per share at $0.50, below the $0.54 consensus forecast. Operating income fell 40% to $1.62 billion, pressured by a 50% rise in operating expenses to fund AI and R&D, $240 million in restructuring charges—possibly tied to the Dojo supercomputer shutdown—and a $400 million tariff impact. Gross margins slipped to 18% from 19.8%, reflecting higher vehicle costs and lower regulatory credit sales of $417 million, down from $739 million.
During the earnings call, Musk shifted focus to future growth. "We’re at a critical inflection point for Tesla and our strategy going forward as we bring AI into the real world," he said, touting plans for robotaxis in eight to ten U.S. metro areas by year-end and Optimus robot version 3 in Q1 2026. He described Optimus as enabling "a world where there is no poverty, where everyone has access to the finest medical care," calling it an "incredible surgeon." Musk also defended his proposed $1 trillion compensation package, up for a shareholder vote on November 6, labeling critics ISS and Glass Lewis as "corporate terrorists" for recommending against it.
The results come amid broader challenges, including Musk's political involvement sparking boycotts and intensified EV competition. Tesla plans volume production of Cybercab, Semi, and Megapack 3 in 2026, with capital expenditures rising substantially. Shares fell about 3% in after-hours trading to around $425.
