Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of X speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, U.S., May 6, 2024.
Tesla reported a 12% increase in third quarter revenue on Wednesday following two straight periods of declines. However, earnings missed analyst estimates, pushing the stock down about 2% in extended trading.
Here's how the company did, compared with estimates from analysts polled by LSEG:
Earnings per share: 50 cents adjusted vs. 54 cents estimated
50 cents adjusted vs. 54 cents estimated Revenue: $28.10 billion vs. $26.37 billion estimated
Total revenue climbed from $25.18 billion a year earlier. Automotive revenue increased 6% to $21.2 billion from $20 billion in the year-ago period, Tesla said.
Net income fell 37% to $1.37 billion, or 39 cents per share, from $2.17 billion, or 62 cents per share a year earlier. The profit drop reflected lower EV prices and a 50% increase in operating expenses, which the company said was in part due to artificial intelligence and "other R&D projects."
The end of the quarter coincided with the expiration of federal tax credits for electric vehicles, which were eliminated with President Donald Trump's spending bill. That pulled sales forward into the quarter as as consumers rushed to take advantage of the incentive before it went away.
On Tesla's last earnings call in July, CEO Elon Musk and finance chief Vaibhav Taneja warned shareholders about the impact of higher tariff costs and the expiration of the tax credits.
Revenue from automotive regulatory credits in the quarter fell 44% to $417 million from $739 million.
Even with the return to overall growth, Tesla's third quarter was marked by a continuing sales slump in Europe, driven partly by consumer backlash against Musk, his incendiary political rhetoric and activism, as well by competition from EV makers like Volkswagen and BYD.
The stock, which plummeted to start the year, has rallied back and is now up almost 9% in 2025. That still trails major indexes and most of its megacap peers.
Analysts are waiting to hear what the company projects for demand. Tesla didn't give volume-specific guidance in its shareholder deck, but said it's still aiming to start "volume production" of the Cybercab, heavy duty electric Semi trucks and new, battery energy storage system, called Megapack 3, in 2026.
Tesla said it's now building out "first generation production lines" for the company's humanoid Optimus robots. Tesla unveiled its fully electric Semi in November 2017. While the company has delivered some of these trucks to early customers, it still lists Semi production lines as "under construction."
Instead of promising to deliver a certain number of EVs and energy products by the end of the year, Tesla said, "It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure and demand for durable goods and related services."
Tesla said it grew its "service area and fleet count" for its Robotaxi service in Austin, which involves safety drivers on board, and launched its Bay Area ride-hailing service. The company said it's obtaining data that will allow it to "quickly scale to other cities in the future" with what it's calling a "universal model."
Earlier this month, Tesla reported deliveries of 497,099 vehicles for the third quarter, a record, on total production of 447,450 vehicles. However, through the first three quarters, deliveries stood at around 1.2 million, down about 6% compared to the same period of 2024.
Tesla also debuted more affordable versions of its popular Model Y SUV and Model 3 sedan in early October. The company said on Wednesday that the new offerings make "our products more accessible to customers in the wake of the expiration of the EV tax credit in the U.S."
The company's biggest growth engine in the quarter was its energy generation and storage business, which saw revenue jump 44% to $3.42 billion. Tesla's energy products include large backup batteries and solar photovoltaics that can power datacenters and other facilities.
Musk's AI startup xAI, which he started in 2023, has been a big buyer of Tesla's energy products. In its 2024 annual report, Tesla said xAI incurred expenses of about $198.3 million for the year and $36.9 million through February of 2025. Most of that was for Tesla's Megapack products.
Tesla executives will host a call with analysts at 5:30 p.m. ET.
WATCH: Tesla reports revenue beat