Key Stats for Tesla Stock
- Price Change for $TSLA stock: 3.3%
- Current Share Price: $424
- 52-Week High: $488
- $TSLA Stock Price Target: $367
What Happened?
Tesla (TSLA) stock dropped nearly 4% after the electric vehicle maker reported third-quarter earnings that missed Wall Street expectations despite posting its first revenue increase in three quarters.
The company earned $0.50 per share on an adjusted basis, falling short of the $0.56 estimate. Revenue came in at $28.10 billion, beating expectations of $26.70 billion and marking a 12% increase from $25.18 billion a year earlier.
But GAAP net income told a different story, plunging 30% to $1.77 billion from $2.51 billion in the year-ago period. The profit decline came from lower EV prices and a 50% jump in operating expenses, which Tesla attributed partly to artificial intelligence and “other R&D projects.”
Automotive revenue rose 6% to $21.2 billion from $20 billion, but regulatory credit revenue collapsed 44% to $417 million from $739 million.
Those credits represent payments from other automakers who need to buy Tesla’s surplus emissions credits to meet regulatory requirements.
The quarter benefited from a surge of buyers seeking to claim federal EV tax credits before they expired.
President Trump’s spending bill eliminated those credits, and consumers rushed to purchase vehicles before the deadline, artificially boosting third-quarter sales.
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What the Market Is Telling Us About Tesla Stock
The market’s negative reaction to TSLA stock indicates investor frustration with the lack of concrete guidance and the company’s inability to translate revenue growth into profit growth.
The earnings call didn’t help matters, as CEO Elon Musk reiterated grand futuristic visions instead of providing the specific near-term guidance investors sought.
Tesla’s third quarter was marked by continuing sales weakness in Europe, driven partly by consumer backlash against Musk’s incendiary political rhetoric and activism. Competition from EV makers like Volkswagen and BYD is also taking market share.
The slow progress of Full Self Driving remains a significant concern. CFO Vaibhav Taneja revealed that customers paying for FSD Supervised, Tesla’s partially automated system, account for only 12% of the company’s current fleet.
That’s a shockingly low adoption rate for a feature that costs thousands of dollars and represents a key part of Tesla’s future vision.
Tesla didn’t provide volume-specific guidance but said it’s still aiming to start “volume production” of the Cybercab robotaxi, heavy-duty electric Semi trucks, and the new Megapack 3 battery storage system in 2026. Musk said on the call he expects Cybercab production to begin in the second quarter of 2026.
Tesla unveiled the fully electric Semi back in November 2017. While Tesla has delivered some trucks to early customers, the Semi production lines are still listed as “under construction.”
Lars Moravy, a Tesla vice president, said the company has built out production lines and is installing equipment. However, Tesla is still working on a version of its partially automated driving systems for the Semi.
Tesla stock received support from its energy generation and storage business, which saw revenue jump 44% to $3.42 billion. The energy business now represents about one-quarter of overall revenue.
Large backup batteries and solar products that power data centers are a key highlight, with Musk’s AI startup xAI being a major buyer of Tesla’s Megapack products.
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 in 2024.
The company launched more affordable versions of the Model Y SUV and Model 3 sedan in early October to make products “more accessible to customers in the wake of the expiration of the EV tax credit in the U.S.”
On the robotaxi front, Musk said he expects Tesla to remove human safety drivers from its Austin vehicles this year and operate the service in eight to 10 metro areas by the end of 2025.
In new markets, Tesla plans to have safety drivers for at least three months. The company said it’s gathering data to “quickly scale to other cities in the future” with a “universal model.”
Tesla stock remains volatile as investors weigh Musk’s ambitious promises against the company’s execution challenges and profit pressures.
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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!
