Tesla sold more vehicles in the third quarter, but profits dropped for the fourth time in a row. According to The Hill, third-quarter earnings fell to $1.4 billion, or 39 cents a share, from $2.2 billion, or 62 cents a share, a year earlier. Revenue rose to $28.1 billion from $25.2 billion in the same period, beating Wall Street forecasts.
Financial Results Miss Expectations
Tesla shares fell 3% to $425.90 in after-hours trading on Wednesday. The company excluded certain charges and reported 50 cents per share, down from 72 cents a year ago. That missed the 56 cents forecast by Wall Street analysts.
Gross margins hit 18%, the highest for this year but still down from a year ago. The figure shows how much money Tesla makes after paying staff, raw materials, and other basic expenses. Four years ago, margins stood at 25%.
The company now offers discounts and other incentives to fight rival EV makers that have been stealing market share. One year ago, CEO Elon Musk predicted 20% to 30% sales growth for 2025.
Boycotts Impact Sales
Boycotts against Musk hit hard earlier this year. His embrace of right-wing politicians alienated potential customers in key markets in the U.S. and abroad. The company also failed to introduce a substantially cheaper car to appeal to more buyers.
Musk revealed two cheaper offerings earlier this month. Stripped-down versions of the Model Y and Model X both cost slightly less than $40,000. Investors were unimpressed because the discount didn’t seem deep enough.
Robotaxi Plans and Other Ventures
Musk sought to shift investor attention away from selling cars. He focused on the company’s driverless robotaxi service, its AI product, and its Optimus robots. He predicted the Optimus will likely become the biggest product of all time.
The CEO said he was confident enough in the robotaxi to remove safety monitors from the driver’s seat by the end of the year. The service is available in Austin, Texas, and San Francisco. Musk said it will roll out to as many as 10 other metro areas also by year end.
Third-quarter sales were boosted by customers rushing to take advantage of a $7,500 federal tax credit for EV purchases. The credit expired on October 1. This may steal sales from the current quarter.
Tesla was also helped by rising sales from its battery storage and electric charging businesses. The EVs still make up much of the overall revenue figures. Garrett Nelson, an analyst at CFRA Research with a sell rating on the stock, said demand for EVs remains the primary concern.
