Tesla (TSLA) stock dipped 3% in after-hours trading following a mixed Q3 earnings report that saw the company set a new delivery record but miss on profits.
The quarter was defined by two narratives: a massive sales surge and a sharp drop in profitability.
- The Miss: Adjusted EPS was $0.50, falling short of the $0.54 estimate. Operating profit dropped a steep 40% year-over-year.
- The Beat: Revenue came in strong at $28.01 billion, beating the $26.27 billion consensus, thanks in part to a record 497,099 vehicle deliveries before the federal EV tax credit expired.
Profitability was hammered by several factors, including lower revenue from regulatory credits and a rising tariff hit, which climbed to $400 million. CEO Elon Musk had previously warned of “a few rough quarters” following the EV tax credit expiration.
Musk’s Pivot: The Robotaxi Roadmap
Shifting investor focus to the future, CEO Elon Musk provided aggressive updates on autonomy and AI:
- Tesla aims to launch Robotaxi tests in 8 to 10 metro areas by the end of the year (including Nevada, Florida, and Arizona).
- Crucially, the company expects to remove all safety drivers from its Robotaxis in “large parts of Austin by the end of this year.”
Analysts are doubling down on this long-term vision, with bulls like Dan Ives arguing that the autonomous valuation alone is worth $1 trillion to the company’s story.
To address affordability immediately post-tax credit, Tesla has already launched stripped-down versions of the Model Y and Model 3, priced as low as $39,990 and $36,990, respectively.## Tesla Q3: Record Deliveries Can’t Save Profit as Stock Dips
Tesla (TSLA) stock was down around 3% in after-hours trading after the company reported mixed third-quarter results. While a sales surge set a new record, the company missed profit estimates, with lower margins and rising tariffs weighing on the bottom line.
Here are the key takeaways from the Q3 report:
| Metric | Q3 Result | Expectation | Result vs. Expectation | Trend |
| Revenue | $28.01 billion | $26.27 billion | Beat | Up 12% YoY |
| Adjusted EPS | $0.50 | $0.54 | Miss | Decline from a year ago |
| Deliveries | 497,099 units | $\approx$439,800 units | Beat (New Record) | Surge due to expiring tax credit |
The strong revenue was overshadowed by a 40% drop in operating profit to $1.624 billion. Tesla cited lower regulatory emissions credit revenue and a rising tariff hit of $400 million (up from $300 million in Q2) as major headwinds. The company warned that the massive sales surge in Q3 was likely pulled forward by the expiring US federal EV tax credit.
Musk’s Forward Pivot: Robotaxi Expansion
CEO Elon Musk is pushing investors to focus on the company’s AI-driven future, particularly the Robotaxi service:
- Driverless Goal: Musk stated the company is expecting to operate Robotaxis with “no safety drivers in large parts of Austin by the end of this year.”
- Wider Tests: Tesla aims to launch tests in 8 to 10 metro areas by year-end, including Nevada, Florida, and Arizona.
For near-term demand, Tesla has launched new stripped-down, more affordable versions of the Model Y ($39,990) and Model 3 ($36,990) to navigate the post-tax-credit environment. Analysts continue to hold a bullish view, with Wedbush’s Dan Ives asserting that the autonomous valuation alone is worth $1 trillion to the company’s long-term story.
Will Tesla’s Robotaxi progress be enough to offset the persistent pressure on its core auto profits in Q4?
