Tesla’s file 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 automobiles — duties he wants to perform if he’s to unlock the complete worth of the $1 trillion compensation bundle that Tesla desires to award him.
The stress 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 file variety of autos within the third quarter of 2025, thanks largely to a rush of consumers in the US who took benefit of the expiring federal EV tax credit score. However that file quarter didn’t result in better earnings. Actually, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final 12 months.
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 12 months. However Tesla solely pulled in a revenue of $1.4 billion, up simply $200 million from the second quarter of this 12 months, in response to a shareholder letter launched Wednesday. The file quarter got here after an abysmal begin to the 12 months 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} huge enhance in working bills — 50% larger in comparison with the third quarter final 12 months — was one of many culprits. That working expense bump was because of spending on AI and different R&D tasks, in addition to “restructuring” fees of almost $240 million. Tesla didn’t clarify what these restructuring fees had been for, but it surely’s presumably associated to the current resolution to shut down the corporate’s six-year-old Dojo supercomputer undertaking.
Tesla cited tariffs as one other drag on income this previous quarter, which 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, 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 deliver AI into the true 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 this may put much more strain on the corporate’s last quarter of the 12 months.
Tesla already wants one other file quarter (after which some) if it desires to easily match the variety of automobiles it shipped in 2024 or 2023. The corporate might 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 state of affairs, Tesla is method off the trail of fifty% year-over-year development that it as soon as promised to traders and shareholders.
However Musk has spent the previous couple of years attempting to get shareholders, traders, workers, and everybody else to look past the corporate’s core enterprise of creating and promoting automobiles. He’s guess the way forward for Tesla on having the ability to create an unlimited community of self-driving autos that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will change into the best-selling product ever.
Tesla supplied little new information on these applications in Wednesday’s letter. Musk mentioned on the convention name that Tesla might 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 top of this 12 months, however as The Info 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 is no such thing as a poverty, the place everybody has entry to the best medical care,” he mentioned. “Optimus shall be an unimaginable surgeon.”
The elevated concentrate on AI, robotics, and self-driving automobiles (together with beginning manufacturing of the two-seater “Cybercab”) can even value Tesla extra subsequent 12 months. Taneja mentioned capital expenditures will enhance “considerably” in 2026 because of these tasks. 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 at hand $1 trillion price of shares to Musk. That plan is up for a vote on the Tesla’s annual shareholder assembly in just a few weeks. The corporate — and Musk — are campaigning arduous. Whereas advisor teams like ISS and Glass Lewis are recommending towards the pay bundle, it’s almost 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 bundle isn’t authorized.
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 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 data from Tesla’s third-quarter convention name.