Tesla reported revenue of $28.05 billion for the third quarter of 2026, matching Wall Street expectations. Non-GAAP earnings reached $0.48 per share, surpassing the consensus of $0.45 but reflecting a 4% decline compared to the previous year. GAAP net income fell 43% to $787 million.
Operating income dropped 56% year-over-year to $718 million, resulting in an operating margin of 2.6%. Total gross margin improved to 19.6%, up from 18.0% a year ago. Automotive gross margin, excluding regulatory credits, rose to 18.1% from 16.3% in the second quarter.
Operating expenses increased by 39% to $4.78 billion, driven by a 69% surge in research and development costs totaling $2.76 billion. Capital expenditures more than doubled to $4.73 billion, while free cash flow reached $1.53 billion. The company ended the quarter with $45.4 billion in cash and investments.
Tesla delivered 486,532 vehicles in the third quarter, a 2.1% year-over-year decrease, while production totaled 464,391 units. Energy storage deployments reached 13.7 GWh. The company reported 1.74 million active FSD subscriptions and noted that its Robotaxi service achieved nearly 2 million cumulative unsupervised miles.
