Revenue Rises 12%, Surpassing Market Expectations
Shares Drop Nearly 2% After Hours
Electric vehicle manufacturer Tesla announced on October 22 (local time) that it recorded $28.1 billion in revenue and earnings per share of $0.50 for the third quarter (July to September).
Revenue surpassed Wall Street’s forecast of $26.37 billion, as compiled by market research firm LSEG, but earnings per share fell short of the expected $0.54. The gross margin was 18%, slightly higher than the market expectation of 17.5%.
Revenue increased by 12% compared to the same period last year, marking the highest quarterly revenue in Tesla’s history. The company returned to growth after two consecutive quarters of declining revenue.
Earlier this month, Tesla reported that third-quarter deliveries rose by 7% year-on-year. This was attributed to U.S. consumers increasing purchases of electric vehicles ahead of the expiration of tax incentives.
Despite the record-high quarterly revenue, net income plunged by 37% to $1.37 billion. Tesla cited increased tariffs, restructuring costs, and a decline in revenue from carbon credit sales as the reasons for the drop in profit. Bloomberg News analyzed that this signals the pressure faced by automakers due to changing federal government policies and rising costs.
The automotive division, which accounts for the majority of revenue, posted $21.2 billion, up 6% from $20 billion in the same period last year. Third-quarter revenue from carbon credits was $417 million, down 44% from a year earlier.
Tesla did not provide an outlook for future earnings. However, the company stated that it aims to begin mass production of the robotaxi “Cybercab,” the electric truck “Semi,” and the energy storage device “Megapack 3” starting in 2026. Tesla also explained that construction of the first-generation production line for its humanoid robot “Optimus” is underway.
Tesla shares fell 0.82% during regular trading on the New York Stock Exchange and dropped nearly 2% in after-hours trading following the earnings announcement.
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