Quick overview

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TSLA shares dropped about 4% to about $408 in after-hours trading, wiping out recent gains and underperforming the Nasdaq. The stock is up 8.7% so far this year, but it is lagging behind peers as the EV market as a whole slows down.

Bears point to competition and delivery risks in 2025, while bulls focus on AI’s potential. Tesla predicts slower Q4 deliveries going forward, but it expects growth to resume in 2026 with the release of new models and improvements in autonomy.

Tesla’s profit declined despite a record quarter of car sales, as rising costs exposed operational pressures, especially as CEO Elon Musk shifts his focus away from the auto industry. Musk urged investors to back his trillion-dollar compensation package while promoting the company’s ambitious but unclear projects, such as its humanoid robot and AI initiatives, during Tesla’s third-quarter earnings. Yet, after a 40% drop in operating profit, he offered little detail on how Tesla plans to revive its core electric vehicle business.

A statement from the company on Wednesday reported adjusted earnings of 50 cents per share for the period, down 31% from a year earlier. Bloomberg consensus estimates projected an average of 54 cents. With President Donald Trump drastically changing US policy, the results—marking the fourth consecutive quarter of lower-than-expected profit—highlight that the company is not immune to the rising costs affecting the auto industry. During the quarter, Tesla’s operating costs rose by 50% to $3.4 billion, with US tariffs having a $400 million impact. The stock has increased as Musk repeatedly describes a future centered on AI, robots, and self-driving tech. However, Tesla provided few answers in its latest report about the timeline for developing these technologies and the costs related to their development.