Tesla’s document gross sales quarter has provided 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 automobiles — duties he wants to perform if he’s to unlock the complete worth of the $1 trillion compensation bundle 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 document variety of autos 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. The truth is, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final yr.
Tesla shipped 497,099 automobiles 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 accordance with a shareholder letter released Wednesday. The document quarter got here after an abysmal begin to the yr for Tesla, which noticed gross sales drop mightily in part because of Musk’s involvement with the Trump administration.
The corporate defined within the letter {that a} huge enhance in working bills — 50% increased in comparison with the third quarter final yr — was one of many culprits. That working expense bump was due to spending on AI and different R&D initiatives, in addition to “restructuring” prices of almost $240 million. Tesla didn’t clarify what these restructuring prices had been for, however it’s probably associated to the current determination to shut down the company’s six-year Dojo supercomputer project.
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 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 carry 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 basically altering the character of transport,” he stated.
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All of it will put much more strain on the corporate’s last quarter of the yr.
Tesla already wants one other document quarter (after which some) if it needs to easily match the variety of automobiles it shipped in 2024 or 2023. The corporate might get some assist from the brand new slightly-cheaper stripped-down versions of the Mannequin 3 and Mannequin Y EVs. However even in that best-case state of affairs, Tesla is approach off the trail of fifty% year-over-year progress that it as soon as promised to buyers and shareholders.
However Musk has spent the previous couple of years making an attempt to get shareholders, buyers, staff, and everybody else to look past the corporate’s core enterprise of constructing and promoting automobiles. He’s wager the way forward for Tesla on with the ability to create an enormous community of self-driving autos that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will turn 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 hundreds of the robots by the tip of this yr, however as The Data has reported, Tesla has run into problems in early production with Optimus.
“Bringing Optimus to market is an extremely troublesome 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 truly 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 can be an unimaginable surgeon.”
The elevated deal with AI, robotics, and self-driving automobiles (together with beginning manufacturing of the two-seater “Cybercab”) may even price Tesla extra subsequent yr. Taneja stated capital expenditures will enhance “considerably” in 2026 due to these initiatives. He additionally stated Tesla has needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise warfare.
Tesla’s third-quarter outcomes come amid the backdrop of the corporate’s proposal to hand $1 trillion worth 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 laborious. Whereas advisor groups like ISS and Glass Lewis are recommending in opposition to the pay bundle, it’s most certainly going to go given the overwhelming assist 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 bundle would afford him than the cash.
“I simply don’t really feel snug 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 info from Tesla’s third-quarter convention name.
