Tesla Shares Drop 5% as Profits Fall Despite Record Sales

Tesla shares fell 5% on Thursday morning after the company reported a sharp decline in third-quarter profits, even as it achieved record vehicle sales. The results highlight ongoing financial pressure on Elon Musk’s automaker following the expiration of a key U.S. tax credit for electric vehicles.

Earnings Miss Despite Strong Revenue

Tesla reported $28.09 billion in revenue for the third quarter, surpassing Wall Street’s estimate of $26.5 billion and marking a 24.8% increase from the previous quarter. However, earnings per share came in at $0.50, below analysts’ forecast of $0.56.

Net profit fell 37% from a year earlier to $1.4 billion. Shares dropped to around $416 after markets opened, extending a slight 0.8% decline from Wednesday.

Musk Highlights Robot Project Over Cars

During the company’s earnings call, CEO Elon Musk focused less on Tesla’s vehicle lineup and more on its humanoid robot project, Optimus. Musk said Tesla was “on the cusp of something really tremendous,” calling Optimus potentially “the biggest product of all time.”

He added that a new version of the robot would be demonstrated in early 2026 and that Tesla’s next-generation AI chip, AI5, would be produced by Samsung and TSMC, while Nvidia chips would still be used for training.

Musk also criticized two shareholder advisory firms, Glass Lewis and ISS, labeling them “corporate terrorists” for opposing his massive pay package, which remains under court review.

Record Deliveries Amid Policy Changes

Tesla delivered over 497,000 vehicles during the third quarter — its highest-ever total — as buyers rushed to take advantage of the now-expired $7,500 federal tax credit for electric vehicles, which ended on October 1.

The company has also begun rolling out cheaper versions of its Model Y and Model 3, aiming to maintain demand amid changing U.S. trade and tariff policies.

Musk’s Net Worth

Despite the profit slump, Musk remains the world’s richest person, with an estimated fortune of $487.5 billion. Earlier this month, he briefly crossed the $500 billion mark after Tesla reported record sales.