Tesla’s file gross sales quarter has provided the corporate a reprieve after a horrible begin to 2025. However CEO Elon Musk is targeted on constructing a “robotic military” and making good on his years-long, unfulfilled promise of self-driving vehicles — duties he wants to perform if he’s to unlock the total worth of the $1 trillion compensation package deal that Tesla needs to award him.
The strain between Tesla’s present automotive-driven enterprise and the AI-centric one which Musk is aiming for has by no means been extra clear.
Tesla delivered a file variety of automobiles within the third quarter of 2025, thanks largely to a rush of consumers in america who took benefit of the expiring federal EV tax credit score. However that file quarter didn’t result in larger earnings. Actually, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final 12 months.
Tesla shipped 497,099 vehicles within the third quarter, which generated $21.2 billion in automotive income — the corporate’s greatest income determine in additional than a 12 months. However Tesla solely pulled in a revenue of $1.4 billion, up simply $200 million from the second quarter of this 12 months, in accordance with a shareholder letter released Wednesday. The file quarter got here after an abysmal begin to the 12 months for Tesla, which noticed gross sales drop mightily partially due to Musk’s involvement with the Trump administration.
The corporate defined within the letter {that a} massive enhance in working bills — 50% larger in comparison with the third quarter final 12 months — was one of many culprits. That working expense bump was because of spending on AI and different R&D initiatives, in addition to “restructuring” expenses of almost $240 million. Tesla didn’t clarify what these restructuring expenses have been for, but it surely’s probably associated to the current choice to close down the corporate’s six-year-old Dojo supercomputer undertaking.
Tesla cited tariffs as one other drag on earnings this previous quarter, that means Musk spent round $300 million to assist elect a president who has harm the corporate’s enterprise. Tesla’s chief monetary officer Vaibhav Taneja stated on a convention name Wednesday the tariff hit was about $400 million.
“We’re at a important inflection level for Tesla and our technique going ahead as we convey AI into the actual world,” Musk stated on the decision. Tesla is on the “starting of scaling, fairly massively, Full Self-Driving and Robotaxi, and essentially altering the character of transport,” he stated.
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All of it will put much more stress on the corporate’s ultimate quarter of the 12 months.
Tesla already wants one other file quarter (after which some) if it needs to easily match the variety of vehicles it shipped in 2024 or 2023. The corporate may get some assist from the brand new slightly-cheaper stripped-down variations of the Mannequin 3 and Mannequin Y EVs. However even in that best-case state of affairs, Tesla is manner off the trail of fifty% year-over-year progress that it as soon as promised to traders and shareholders.
However Musk has spent the previous couple of years attempting to get shareholders, traders, workers, and everybody else to look past the corporate’s core enterprise of constructing and promoting vehicles. He’s wager the way forward for Tesla on with the ability to create an enormous community of self-driving automobiles that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will change into the best-selling product ever.
Tesla provided little new information on these applications in Wednesday’s letter. Musk stated on the convention name that Tesla could begin constructing the third model of Optimus within the first quarter of 2026. He had as soon as promised to construct 1000’s of the robots by the tip of this 12 months, however as The Info has reported, Tesla has run into problems in early production with Optimus.
“Bringing Optimus to market is an extremely tough activity, to be clear. It’s not like some stroll within the park,” Musk stated.
However Musk continued Tesla’s gauzy, unspecific claims about how a lot Optimus will change the world. “You’ll be able to really create a world the place there is no such thing as a poverty, the place everybody has entry to the best medical care,” he stated. “Optimus will probably be an unbelievable surgeon.”
The elevated concentrate on AI, robotics, and self-driving vehicles (together with beginning manufacturing of the two-seater “Cybercab”) can even value Tesla extra subsequent 12 months. Taneja stated capital expenditures will enhance “considerably” in 2026 because of these initiatives. He additionally stated Tesla has needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise battle.
Tesla’s third-quarter outcomes come amid the backdrop of the corporate’s proposal at hand $1 trillion value of shares to Musk. That plan is up for a vote on the Tesla’s annual shareholder assembly in a couple of weeks. The corporate — and Musk — are campaigning exhausting. Whereas advisor groups like ISS and Glass Lewis are recommending towards the pay package deal, it’s almost definitely going to go given the overwhelming help from shareholders on earlier efforts.
That hasn’t stopped Musk from threatening to stroll away from Tesla if the package isn’t approved.
On Wednesday’s name, he reiterated his declare that he cares extra concerning the voting management the compensation package deal would afford him than the cash.
“I simply don’t really feel comfy constructing robotic military right here after which being ousted due to some asinine suggestions from ISS and Glass Lewis, who haven’t any friggin’ clue. I imply, these guys are company terrorists,” Musk stated.
This story has been up to date with new data from Tesla’s third-quarter convention name.
