Tesla’s document gross sales quarter has supplied the corporate a reprieve after a horrible begin to 2025. However CEO Elon Musk is concentrated 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 complete worth of the $1 trillion compensation package deal that Tesla desires 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 document variety of automobiles within the third quarter of 2025, thanks largely to a rush of shoppers in america who took benefit of the expiring federal EV tax credit score. However that document quarter didn’t result in higher earnings. In actual fact, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final yr.
Tesla shipped 497,099 vehicles within the third quarter, which generated $21.2 billion in automotive income — the corporate’s finest income determine in additional than a yr. However Tesla solely pulled in a revenue of $1.4 billion, up simply $200 million from the second quarter of this yr, in keeping with a shareholder letter launched Wednesday. The document quarter got here after an abysmal begin to the yr for Tesla, which noticed gross sales drop mightily partly due to Musk’s involvement with the Trump administration.
The corporate defined within the letter {that a} large enhance in working bills — 50% larger in comparison with the third quarter final yr — 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 had been for, nevertheless it’s presumably associated to the current determination to shut down the corporate’s six-year-old Dojo supercomputer venture.
Tesla cited tariffs as one other drag on income this previous quarter, that means Musk spent round $300 million to assist elect a president who has damage the corporate’s enterprise. Tesla’s chief monetary officer, Vaibhav Taneja, mentioned on a convention name Wednesday the tariff hit was about $400 million.
“We’re at a vital inflection level for Tesla and our technique going ahead as we convey AI into the actual world,” Musk mentioned on the decision. Tesla is on the “starting of scaling, fairly massively, Full Self-Driving and Robotaxi, and basically altering the character of transport,” he mentioned.
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All of it will put much more strain on the corporate’s closing quarter of the yr.
Tesla already wants one other document quarter (after which some) if it desires to easily match the variety of vehicles it shipped in 2024 or 2023. The corporate may get some assist from the brand new barely cheaper stripped-down variations of the Mannequin 3 and Mannequin Y EVs. However even in that best-case situation, Tesla is approach off the trail of fifty% year-over-year development that it as soon as promised to buyers and shareholders.
However Musk has spent the previous few years making an attempt to get shareholders, buyers, workers, and everybody else to look past the corporate’s core enterprise of creating and promoting vehicles. He’s guess the way forward for Tesla on having the ability to create an unlimited community of self-driving automobiles that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will turn out to be the best-selling product ever.
Tesla supplied little new data on these applications in Wednesday’s letter. Musk mentioned 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 yr, however as The Data has reported, Tesla has run into issues in early manufacturing with Optimus.
“Bringing Optimus to market is an extremely tough activity, to be clear. It’s not like some stroll within the park,” Musk mentioned.
However Musk continued Tesla’s gauzy, unspecific claims about how a lot Optimus will change the world. “You possibly can really create a world the place there isn’t any poverty, the place everybody has entry to the best medical care,” he mentioned. “Optimus might be an unimaginable surgeon.”
The elevated concentrate on AI, robotics, and self-driving vehicles (together with beginning manufacturing of the two-seater “Cybercab”) will even value Tesla extra subsequent yr. Taneja mentioned capital expenditures will enhance “considerably” in 2026 because of these initiatives. He additionally mentioned Tesla has needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise struggle.
Tesla’s third-quarter outcomes come amid the backdrop of the corporate’s proposal handy $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 teams like ISS and Glass Lewis are recommending in opposition to the pay package deal, it’s more than likely going to move given the overwhelming help from shareholders on earlier efforts.
That hasn’t stopped Musk from threatening to stroll away from Tesla if the package deal isn’t accepted.
On Wednesday’s name, he reiterated his declare that he cares extra in regards to 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 mentioned.
This story has been up to date with new info from Tesla’s third-quarter convention name.
