Tesla reported a steep drop in profits for the third quarter, with net income falling 37% to $1.4bn, down from $2.2bn a year earlier. Despite exceeding Wall Street revenue expectations at over $26bn, the company missed earnings forecasts, posting $0.50 per share against the predicted $0.54. Operating income also fell short at $1.62bn versus the expected $1.65bn.
The profit decline came even as vehicle deliveries surged, driven by a rush among US consumers to secure electric vehicle tax credits before they expired at the end of last month. The loss of these credits, resulting from the One Big Beautiful Bill Act, has been a factor in tensions between Elon Musk and President Donald Trump and continues to affect Tesla's sales outlook.
In its earnings release, Tesla highlighted progress in AI and autonomous driving technology, with Musk claiming on an investor call that 'no one can do what we can do with real-world AI.' He also touted the potential of Tesla's Optimus robots, saying they could become 'the biggest product of all time' and help create 'a world with no poverty.'
The results come ahead of a crucial shareholder vote on 6 November on Musk's proposed $1tn pay package, which is contingent on Tesla reaching ambitious milestones such as an $8.5tn market cap. Two proxy advisory firms, Glass Lewis and ISS, have recommended voting against the plan, prompting Musk to accuse them of 'corporate terrorism.'
Musk also addressed Tesla's robotaxi service, stating that safety drivers would soon be removed from vehicles in Austin. This comes as US regulators investigate crashes involving Tesla's Full Self Driving technology. Additionally, Musk has clashed with Transportation Secretary Sean Duffy, calling him 'Sean Dummy' after Duffy reopened bidding for NASA's Artemis contracts due to delays by Musk's SpaceX.
