Tesla achieved record vehicle deliveries and energy storage deployments in the third quarter, alongside higher revenue, but its profit declined. This profit pressure stemmed from margin headwinds and a surge in demand that was pulled forward by U.S. federal EV tax credits expiring at the end of September. The company delivered 497,099 vehicles, a new quarterly record, with production slightly lower to meet this demand surge. Revenue reached approximately $28.1 billion, exceeding expectations, but non-GAAP earnings per share were around $0.50, below the previous year's levels due to compressed automotive margins.
The accelerated purchases by U.S. buyers ahead of the September 30 tax credit expiration boosted third-quarter sales. However, this forward pull of demand is expected to lead to softer consumer demand in the fourth quarter. Record deliveries were primarily driven by the Model 3 and Model Y, while energy storage deployments also hit an all-time high of 12.5 GWh, with the energy division offering higher margins compared to automotive.
Despite record revenue, earnings pressure persisted, with automotive gross margins likely in the mid-to-high teens due to ongoing price competition and cost pressures. Net income reportedly fell by about 37% year-over-year, with margin compression and the tax credit-driven demand pull-forward being key factors impacting profitability. While Tesla met or exceeded revenue expectations, it fell short on profitability compared to consensus previews.
Looking ahead, investors will be closely monitoring the post-credit demand trajectory, au... download the app to read more
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