Tesla posted a net profit of $787 million in the third quarter, representing a 43 percent decline compared to the same period a year earlier. Despite this sharp drop in profit, the electric car manufacturer managed to exceed financial market expectations, as revenue remained stable at $28 billion and investors feared an even worse result due to investments in artificial intelligence and robotics.
Car Sales Rise While Automotive Revenue Declines
The automaker saw revenue come in at 28.0 billion dollars, equal to revenue in the third quarter of 2025, according to the figures published by the electric car manufacturer on Wednesday evening. Worldwide, 464,391 cars were sold, representing a 4 percent increase year-on-year. The company also reported that the quarter closed with the largest passenger vehicle order backlog in four years.
Various developments were visible within the different divisions of the company. Automotive revenue declined by 3 percent year-on-year, and the energy division saw revenue decrease by 16 percent to 2.9 billion dollars. In contrast, revenue from services rose by 33 percent to 4.6 billion dollars.
Net Profit Falls but Free Cash Flow Stays Positive
Net profit fell from $1.4 billion to $0.8 billion. Analysts had anticipated that Tesla would spend significantly more money than it would bring in due to all the investments in AI and robots, but free cash flow actually turned out to be a positive $1.5 billion.
"We continue to invest in the future through R&D and capital expenditures across our diverse business activities, including SI, robotics, and energy. There is still a lot of hard work ahead, but we are more optimistic than ever.", thus Tesla. Following the publication of the results, Tesla stock rose by more than one percent in after-hours trading.
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