Tesla beats on earnings and sales even as auto revenue declines — SkimNews
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- Tesla beat Q3 estimates with adjusted EPS of 48 cents (vs. 43 cents expected) and revenue of $28.05 billion (vs. $27.9 billion expected), though automotive revenue declined 3% to $20.56 billion on lower average sales prices and battery supply constraints.
- Tesla's net income attributable to common shareholders plummeted 29% year-over-year to $787 million (22 cents a share), free cash flow plunged 62% to $1.53 billion, and capital expenditures more than doubled to $3.73 billion as the company ramped AI and robotics spending.
- Tesla reported active FSD (Supervised) subscriptions grew 67% year-over-year to 1.74 million, with the $99/month partially automated system expanding by 20 percentage points in uptake from the second quarter.
- Services and other revenue climbed 33% year-over-year to $4.61 billion, partially offsetting a 16% drop in energy revenue to $2.88 billion and the automotive decline.
- Tesla logged record auto sales in Canada, Japan, Taiwan, and Australia during the quarter, but reported Q3 vehicle deliveries of 486,532—roughly 2% below the year-ago figure—while facing intensifying competition from Chinese EV makers BYD and Xiaomi and the prior-year end of a federal EV tax credit.
- Elon Musk, speaking on SpaceX's quarterly call a day before Tesla's earnings, told investors a Tesla-SpaceX merger would be "a good idea," noting both boards have formed special committees to discuss a tie-up that would require a 50% shareholder vote—a hurdle he called "quite high."
Why it matters: The headline-friendly earnings beat obscures meaningful deterioration underneath: free cash flow collapsed 62% to $1.53 billion and net income dropped 29% even as Tesla doubled capex to $3.73 billion, meaning shareholders absorbed both a profitability hit and a massive strategic bet on Musk's AI and robotics roadmap. The same call that delivered the "beat" also featured Musk publicly endorsing a Tesla-SpaceX merger—fueled partly by their joint semiconductor factory with Intel in Grimes County, Texas—creating an immediate governance question for Tesla holders who must approve any tie-up by 50% of outstanding shares.
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