Carmaker exceeded Wall Street’s expectations with more than $26bn in revenue, but saw a 37% drop in profits
Despite record vehicle sales, Tesla saw a precipitous drop in profit in its most recent quarter.
A rush to buy electric vehicles before a US tax credit for them disappears had boosted Tesla’s flagging sales, leading to the automaker exceeding some of Wall Street’s projections in its most recent financial quarter. Yet the company failed to meet earnings expectations and its stock fell in after hours trading.
Tesla reported third-quarter earnings of 50 cents a share on Wednesday after market close, less than the 54 cents that market analysts predicted. The automaker exceeded Wall Street’s expectations of $26.457bn in revenue. Its operating income was $1.62bn against expectations of $1.65bn. It also reported a net income of $1.4bn, down from $2.2bn, a drop of 37% in its profits.
Tesla’s deliveries in the third quarter surged from earlier in the year, an increase that analysts attributed to consumers attempting to lock-in electric vehicle tax credits that expired at the end of last month. The loss of EV credits as a result of Donald Trump’s One Big Beautiful Bill Act was a factor in the public breakup between Musk and the president and has continued to influence the company’s sales forecasts.
