Tesla posts record third-quarter revenue but shares slide
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The news: Tesla reported its best third-quarter revenue result after seeing the highest quarterly sales of its electric vehicles during the period.
The numbers: Elon Musk's electric vehicle maker reported total revenue of USD28.1 billion ($43.3 billion) for the three months to 30 September, up 12% year on year and ahead of consensus estimates of USD26.4 billion, according to LSEG data.
However, net income fell 37% to USD1.4 billion. Profit per share was 50 cents, below average forecasts of 55 cents. Gross margin was 18%, compared with estimates of 17.5%.
Tesla shares dropped around 1.7% in extended trading on the Nasdaq.
The context: Quarterly sales spiked after US consumers surged to buy electric vehicles before a USD7,500 federal tax credit expired at the end of September.
Tesla reported record free cash flow of nearly USD4 billion in the quarter, well above the average Bloomberg-surveyed analyst estimate of USD1.25 billion. That came as Tesla’s global vehicle inventory fell to its lowest level in about a year, with fewer than 10 days’ worth of sales, as discounts and the final days of the tax credit helped drive demand.
The company said the decline in profitability during the period was driven by increased R&D costs across areas including artificial intelligence, as well as a higher average cost per vehicle, which was elevated by tariff rises.
What they said: "While we face near-term uncertainty from shifting trade, tariff and fiscal policy, we are focused on long-term growth and value creation," the company said in a shareholder update.
"We are prudently making the necessary investments in our business, including future business lines, that we believe will drive incredible value for Tesla and the world across transport, energy and robotics."
The source: Tesla media release
