Tesla’s third quarter results reveal a company riding high on revenue growth while bracing for massive investments in artificial intelligence. The electric vehicle maker reported $28.095 billion in quarterly revenue, crushing Wall Street’s expectations of $26.457 billion. That’s a 12% jump compared to the same period last year.
Tesla crushed Wall Street expectations with $28.095 billion in quarterly revenue, a 12% year-over-year jump driven by AI investment momentum.
The company’s energy business drove much of this success. Energy revenue hit $3.4 billion, up 44% year-over-year. For the first time, Tesla’s energy division achieved over $1 billion in gross profit. Energy storage rollouts reached a record 12.5 gigawatt-hours during the quarter, showing strong demand for battery products beyond vehicles.
Vehicle production and deliveries also impressed investors. Tesla produced over 447,000 vehicles and delivered more than 497,000. The Model 3 and Model Y lines accounted for the vast majority of these numbers. Automotive revenues grew 29% compared to the previous quarter.
However, profits didn’t match revenue growth. GAAP operating income fell to $1.6 billion, down 40% year-over-year. The operating margin dropped to 5.8%. Non-GAAP net income reached $1.8 billion, but non-GAAP earnings per share came in at $0.50, slightly below Wall Street’s $0.55 expectation. Tariff impacts exceeded $400 million for the quarter, pressuring results.
Despite the profit slowdown, Tesla generated impressive cash. Operating cash flow reached $6.2 billion. Free cash flow hit nearly $4.0 billion, marking a company record. The company’s cash position stood at $41.6 billion in ending cash, equivalents, and investments.
Looking ahead, Tesla’s leadership signaled significant changes coming. The company plans to substantially increase capital spending in 2026 for artificial intelligence projects. Key initiatives include Optimus robotics development and a Robotaxi network expansion, with a planned Cybercab launch. These investments represent Tesla’s bet that AI and automation will drive future growth.
The quarter demonstrates Tesla balancing current profitability with future ambitions. While profits declined amid tariff pressures and market competition, the company’s expanding energy business and record cash generation provide resources for the expensive AI investments ahead. Tesla’s battery technology continues to improve with warranties covering battery capacity until it drops to 70% after typically 100,000 miles, reducing long-term ownership concerns for consumers.