Key Takeaways
- Tesla fell 11% on November 5 after the midterms, then rebounded as robotaxi rides launched in San Antonio and Musk set a Cybertruck wind-down.
- Services and other revenue jumped 33% to $4.61 billion in the third quarter, while automotive fell 3% and energy dropped 16%.
- EBIT fell 56% to $718 million, and free cash flow turned positive mainly because capex ran billions below forecasts.
- The fourth-quarter report, expected in late January, should show whether services growth held and capex landed near $20 billion.
Tesla (TSLA) just had one of its wildest weeks of 2026. Shares sank 11% on November 5, following a 3.3% drop the day before. Democrats outperformed in the midterm elections, and investors started doubting how far Elon Musk can expand his business empire.
SpaceX (SPCX) got hit too. Musk’s rocket, satellite and AI company fell 9% that Thursday. Both stocks now trade on the same headlines because special committees at each company are studying a possible merger.
Then the rebound arrived. Musk said Cybertruck production would wind down around mid-2027 to make room for Cybercabs. On Monday, Tesla rose more than 4% as robotaxi rides started in San Antonio, a city where Alphabet (GOOGL) unit Waymo already operates.
A whipsaw in five sessions
Here is how the week unfolded:
- November 4 and 5: Tesla fell 3.3% and 11% as election results landed.
- November 6: Musk posted that Cybertruck output at Gigafactory Texas would wind down around the middle of next year.
- November 9: Tesla expanded robotaxi service to San Antonio, and Musk said many Cybertruck buyers would get refunds.
“We will try to make as many as possible before shutting down the line in about 8 months, but will have to return deposits for a lot of people,” Musk wrote on X.
That sounds like too much demand. Still, US Cybertruck sales fell 48% to 20,237 units last year, according to Kelley Blue Book. Musk once projected 250,000 a year.
So where did the whipsaw leave the stock?
Tesla was down about 24% for the year at the November 5 close. The rebound clawed back only part of that slide.
Services carries the robotaxi hopes
Tesla’s third quarter explains why Musk wants the floor space. Revenue was flat at $28.05 billion, and the two biggest segments shrank. Automotive fell 3% to $20.56 billion, while energy generation and storage dropped 16% to $2.88 billion.
Services and other was the exception…
That segment, which includes FSD subscriptions and robotaxi rides, jumped 33% to $4.61 billion. It now makes up about 16% of revenue. Management expects robotaxi to become a significant part of revenue and profit in 2027.
Waymo, however, is already ahead on the ground. It began San Antonio rides in February and raised $16 billion earlier this year at a $126 billion valuation.
The Cybercab swap is Tesla’s answer. It is betting a purpose-built two-seater can run rides more cheaply than a converted Model Y.
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The margin math stays thin
Gross margin improved to 19.6% from 18.0% a year ago. Operating margin went the other way.
EBIT fell 56% to $718 million as AI and Optimus spending climbed. Adjusted EPS of $0.48 still beat the $0.45 consensus.
Cash flow looked better, but for a softer reason. Free cash flow reached $1.53 billion against an expected $4.92 billion burn, because capex of $4.73 billion ran well below forecasts. Tesla also cut its 2026 capex target to about $20 billion from more than $25 billion.
Compare that operating line with a year ago.
The margin was 2.6%, down from 5.8%. Then there is the merger. “I do think there’s a lot of merit to combining the companies,” Musk said on SpaceX’s October 20 earnings webcast. Yet Tesla would need approval from 50% of all shareholders.
My take: Giving Cybertruck floor space to the Cybercab is sensible capital allocation. But the rebound priced in robotaxi success before the margins show any, so I’d wait for proof before chasing it.
The next checkpoint is the fourth-quarter report, expected in late January. It should show whether services growth held up and whether capex really landed near $20 billion.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
