TLDR
- Tesla sets Q3 records in revenue, cash flow, and EVs—but stock slides.
- TSLA dips 0.82% despite strong earnings and growth in deliveries.
- Energy storage soars 81%, boosting Tesla’s diversification efforts.
- AI, FSD v14, and Optimus robot signal Tesla’s future-focused tech push.
- Tesla eyes long-term gains in AI and software as margins tighten.
Tesla (TSLA) stock declined 0.82% to close at $438.97 despite the company posting its highest-ever quarterly revenue and free cash flow.
Tesla, Inc., TSLA
The Q3 2025 results showed robust EV deliveries and surging energy deployments, yet the market reaction remained negative. TSLA performance continues to highlight strong fundamentals even as the stock registers short-term fluctuations.
Record Revenue and Free Cash Flow Support Strong Fundamentals
Tesla reported a 12% year-over-year increase in total revenue, reaching $28.095 billion for the third quarter of 2025. Free cash flow also hit a new high of $3.990 billion, reflecting efficiency in capital allocation and operational strength. This financial boost helped push total cash and investments up to $41.647 billion, representing a sequential increase of $4.9 billion.
Gross profit reached $5.054 billion with a gross margin of 18.0%, while operating income stood at $1.624 billion, reflecting a margin of 5.8%. Operating income dropped 40% compared to the same quarter last year due to higher operating expenses and restructuring costs. However, adjusted EBITDA was recorded at $4.227 billion with a 15.0% margin, highlighting underlying business resilience.
Net income came in at $1.373 billion on a GAAP basis, translating to diluted earnings per share of $0.39. On a non-GAAP basis, net income was $1.770 billion with EPS of $0.50. Tesla (TSLA) continues to show profitability while reinvesting in growth and innovation.
Vehicle Deliveries, Energy Storage Push Operational Growth
Tesla delivered 497,099 vehicles during the third quarter, rising 7% year over year. Most of the growth came from Model 3 and Model Y, which made up 481,166 deliveries, increasing 9%. Production totaled 447,450 vehicles, with inventory ending at just 10 days of supply.
Energy storage deployments surged to a record 12.5 GWh, up 81% from the same period last year. Tesla also reported substantial gains in Energy and Services gross profit, which helped offset some margin pressures related to vehicle sales. The company credited its Shanghai Megafactory and Powerwall sales for the continued momentum in the segment.
New vehicle launches included Model 3 and Model Y Standard variants and a Model Y Performance, all priced to broaden market access. Tesla also expanded its certified pre-owned leasing program and introduced the longer Model YL in China. These initiatives aim to drive volume growth and strengthen global competitiveness.
AI, Technology and Strategic Expansion Strengthen Long-Term Vision
TSLA began deploying its FSD (Supervised) v14 software with improved handling of complex driving conditions. The company also expanded Robotaxi services in Austin and introduced ride-hailing in the Bay Area. Meanwhile, AI infrastructure grew to 81,000 H100-equivalent GPUs, enhancing Tesla’s Cortex training system.
A new semiconductor deal with Samsung and progress at the Texas lithium refinery underscore the advancements in supply chain and manufacturing. Tesla also announced that LFP battery lines in Nevada will begin operations in Q1 2026. Additionally, new battery packs are being introduced for Model 3 and Model Y Standard variants.
In energy, Tesla launched Megablock, which bundles four Megapack 3 units for faster deployment at utility-scale. The v4 Supercharger debuted with triple the power density and improved charging for both passenger and Semi vehicles. Tesla continues to invest in hardware, software, and infrastructure for scale.
Guidance Emphasizes Balance Between Hardware and Software Growth
Tesla cited global trade shifts and economic changes as potential risks, but confirmed that it has ample liquidity for its roadmap and expansions. It maintained that future profits will increasingly come from software, AI, and fleet-based services alongside core vehicle margins. Production of Cybercab, Semi, and Megapack 3 is still scheduled to ramp up in 2026.
First-generation production lines for the humanoid Optimus robot are already being installed, signaling intent for future automation scaling. Tesla reiterated its confidence in its capacity to generate long-term value through integrated vertical innovation. Despite the stock pullback, operational and financial metrics show Tesla remains in a strong position.
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