Tesla shares dropped over 3% in after-hours trading despite reporting adjusted earnings of 48 cents per share for the third quarter, surpassing the analyst consensus of 45 cents. Revenue remained flat year-over-year at $28.05 billion, slightly missing the expected $28.34 billion.
The company generated $1.53 billion in free cash flow, exceeding analyst expectations of a $4.5 billion burn. This was largely driven by capital expenditures of $4.73 billion, which were $3 billion lower than anticipated. Tesla ended the quarter with $45.4 billion in cash and investments.
Operating income declined 56% to $718 million as operating expenses rose 39%, fueled by a surge in research and development spending to $2.76 billion. Automotive revenue fell 3% to $20.56 billion, with total vehicle deliveries reaching 486 532 units, a 2% decrease.
Energy storage deployments grew 10% to 13.7 gigawatt-hours, though segment revenue fell 16% to $2.88 billion. Tesla plans to fund its reduced 2026 capital expenditure forecast of $20 billion primarily through operating cash flows and has secured $30 billion in borrowing capacity.
Active subscriptions for Full Self-Driving reached 1.74 million, a 67% increase. Tesla has begun high-volume production of Optimus robots in Fremont and aims to reach a production rate of 20 000 units per week within at least a year, with external deliveries expected by the end of 2027.
