Tesla topped Wall Street expectations for third-quarter revenue on Wednesday, buoyed by a recovery in car deliveries and expanding energy storage sales, even as substantial investments in artificial intelligence and robotaxis trimmed profit margins.
The electric vehicle maker based in Austin, Texas, recorded $28.05 billion in revenue for the quarter ending September 30. That surpassed the $27.88 billion average forecast from analysts compiled by LSEG, while remaining slightly below the $28.10 billion generated during the same period last year.
Vehicle deliveries reached 486,532 units for the quarter, outperforming market projections of roughly 461,100 vehicles despite registering a 2% decline compared to the previous year.
For the second consecutive quarter, sales outstripped output, with 464,391 vehicles produced—reducing overall inventory levels by more than 22,000 units. Projections from Visible Alpha indicate Wall Street anticipates around 1.77 million deliveries in 2026.
The Model 3 and Model Y represented the vast majority of sales. Combined deliveries for other vehicles, including the Cybertruck, dropped to 8,295 from 12,364 in the second quarter. Meanwhile, Tesla ended Model S and Model X manufacturing at its Fremont facility, converting those lines for its initial industrial-scale Optimus production.
Pressure remains on Tesla's main automotive division as international competitors introduce newer and lower-priced alternatives, leaving the company heavily reliant on its established Model 3 and Model Y. Nonetheless, the company surpassed 10 million total lifetime deliveries and expects the Model Y to claim the title of the world's best-selling vehicle this year.
To boost buyer interest, Tesla introduced lower-cost, simplified trims for both core vehicles and debuted a six-seat Model Y in the US market in July. Still, domestic demand faced headwinds following the expiration of tax credits last year.
These financial results arrive as investors evaluate a potential combination with SpaceX. Musk confirmed on Tuesday that both entities have appointed special committees to examine a possible deal.
“This is definitely kind of a question where I feel like I’m tap dancing through a minefield, but I do think there’s a lot of merit to combining the companies,” Musk said during a SpaceX earnings call on Tuesday. It wasn’t “a certainty,” he added.
Shareholders continue to seek concrete signs that Musk's push toward autonomous driving and robotics can successfully translate into commercial revenue.
Earlier this month, Tesla disclosed that its Austin Cybercab fleet expanded from under 40 vehicles to over 300 within a month, with plans to expand to Dallas next. The company introduced unsupervised robotaxi service in Miami, Orlando, and Tampa in July, following earlier rollouts in Dallas and Houston in April.
Tesla's energy segment has increasingly balanced its vehicle sales, driven by strong demand for utility-scale batteries from data centers and renewable energy projects. However, the firm warned that existing tariff policies pose a greater challenge to its energy operations than to its automotive line.
In Europe, Dutch regulators approved Full Self-Driving (Supervised) in April, with additional countries following suit ahead of an anticipated vote on broader European approval later this year. Tesla agreed to market the feature as Tesla Assisted Driving across the region.
Tesla shares have dropped approximately 14% this year. Still, with a market valuation near $1.4 trillion, it retains its status as the world's premier automaker by value, underpinned by investor confidence in self-driving technology, energy products, robotaxis, and humanoid robotics.
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