Tesla Returns to Growth But Earnings Miss Sends Shares Lower

After two straight quarters of declines, Tesla reported a 12% revenue increase to $28.1 billion in the third quarter, boosted by strong energy storage sales and new Model Y and Model 3 variants.

But earnings fell short of estimates, sending shares down nearly 5% in after-hours trading. Profit slid 37% year-over-year as costs surged for artificial intelligence and new product development.

Energy surge offsets lower EV margins

Tesla’s automotive revenue rose 6% to $21.2 billion, while its energy generation and storage division jumped 44% to $3.42 billion, now accounting for roughly a quarter of total revenue. The company cited growing demand for Megapack batteries and solar systems, with its energy business offsetting lower EV margins caused by recent price cuts.

Regulatory credit revenue plunged 44%, and operating expenses climbed 50%, partly due to ongoing AI initiatives and “other R&D projects,” according to CNBC.

Musk outlines big ambitions but few specifics

On the earnings call, Elon Musk provided few concrete forecasts, focusing instead on Tesla’s longer-term plans. He said production of the Cybercab, Semi, and new Megapack 3 is slated for 2026, with Robotaxi trials in Austin and the Bay Area expanding to up to 10 metro areas by late 2025.

Tesla also continues work on its humanoid Optimus robot, with a V3 prototype expected in early 2025. Despite strong revenue growth, the company offered no new delivery guidance as global demand, tariffs, and policy changes weigh on forecasts.

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