In the third quarter, Elon Musk’s electric vehicle firm recorded $1.4 billion in earnings, a 37% decrease from the same time last year.
Tesla announced a significant decline in earnings on Wednesday, stating that a boost from higher car sales was more than offset by a drag from tariffs and other costs. In the third quarter, Elon Musk’s electric vehicle firm recorded $1.4 billion in earnings, a 37% decrease from the same time last year.
In addition to tariffs—which executives said were over $400 million during the quarter—the company’s quarterly press statement pointed to decreased regulatory credit revenues and increased restructuring costs as reasons for the lower-than-expected profits.
Due in part to higher investments in R&D, operational expenditures increased by 50% to $3.4 billion, while revenues increased by 12% to $28.1 billion. Tesla is making investments that will result in “great value for Tesla and the globe across transport, energy, and robotics,” despite the fact that it confronts “near-term uncertainty from altering trade, tariff, and fiscal policies.”
In the third quarter, the expiry of a federal tax credit on September 30 encouraged consumers to increase their purchases of electric cars made by Tesla and other firms, boosting sales in the US.
Tesla released two “standard” cars at somewhat lower price points in early October in response to those better-than-expected sales. Some analysts expressed doubt that the cars would result in a long-term increase in customer demand, while others gave the products mixed assessments. Leading auto experts have said that they do not anticipate a significant increase in Tesla sales until the company introduces a new model.
An October 3 note from JPMorgan said, “We think that for Tesla to return to growth on a sustained basis needs an extension of the company’s portfolio,” aiming for the first quarter of 2026 as the anticipated launch date for additional vehicles.
Dan Ives, a Wedbush analyst, also mentioned early next year as a timeline for new models, emphasizing that investors should pay close attention to Musk’s advancements in robotics, artificial intelligence, and autonomy.
Ives said that autonomous technology will increase Tesla’s market value by $1 trillion. “We continue to firmly think the most critical chapter in Tesla’s development narrative is now starting with the AI age now here,” he added.
Additionally, if the controversial CEO accomplishes important performance and market capitalization benchmarks, shareholders will approve a remuneration package for Musk at the firm’s November 6 annual meeting. This package may exceed $1 trillion and increase Musk’s overall ownership in the business to more than 25% of all shares.
Musk said that as the business pursues bold endeavors in robotics and other fields, he wants the larger share to have greater influence. During a conference call, Musk said, “It is not like I am going to go spend the money,” That is the crux of the matter. If I do not have at least a significant effect, I do not feel confident enough to develop that robot army.”
– Heading out of Washington
Following steep drops in the spring when Musk was the target of harsh criticism for his involvement in President Donald Trump’s administration and outcry over his support for other far-right politicians, Tesla’s stock has rebounded in recent weeks.
Due to boycotts and incidents of car vandalism, sales of Tesla automobiles have been particularly slow in the US and Europe. Although the termination of the $7,500 tax credit increased US sales in the previous quarter, a decline in the fourth quarter is anticipated.
However, since Musk departed the White House in May, the stock has surged. Following the report, shares dropped 3.2 percent in after-hours trade on Wednesday.
Musk has not been as vocal about politics since then, but earlier this week he got into a heated spat with Trump’s acting NASA Administrator when the space agency director welcomed other businesses to bid against the billionaire’s SpaceX for the mission to send people back to the moon.
“Sean Dummy wants to destroy NASA!” In a post on X, Musk made reference to Sean Duffy, the US Transportation Secretary. Although he “loves” SpaceX, Duffy told Fox News that the firm is “behind” schedule. On Fox News, Duffy said, “They stretched their timeframes out and we are in a race against China.”