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Tesla, Inc. (TSLA)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue beat, EPS miss: Tesla reported $28.10B revenue, +12% YoY and +25% QoQ, versus Wall Street consensus of ~$26.70B; non-GAAP diluted EPS was $0.50 versus consensus ~$0.559, while GAAP diluted EPS was $0.39. Record free cash flow of $3.99B and cash/investments rose to $41.65B (+$4.9B QoQ). (Revenue/EPS consensus marked with asterisks in tables; Values retrieved from S&P Global)*
  • Strong operations: Record vehicle deliveries (497,099), record energy storage deployments (12.5 GWh), and Robotaxi service expansion to Austin and the Bay Area (with plans to remove safety drivers in Austin within months).
  • Margin dynamic: GAAP gross margin expanded sequentially to 18.0% (from 17.2%), operating margin to 5.8% (from 4.1%), despite >$400M tariff headwinds across automotive and energy and higher OpEx for AI/R&D and restructuring.
  • AI and product roadmap: FSD v14 began deployment; AI training compute increased to 81k H100 equivalents; lithium refinery starts Q4’25 and LFP lines in Nevada in Q1’26; Cybercab, Semi, Megapack 3 on schedule for volume production starting in 2026.
  • Potential stock reaction catalysts: Revenue beat and record FCF, concrete Robotaxi/unsupervised FSD timelines, and expanded AI chip strategy (AI5 with Samsung and TSMC).

What Went Well and What Went Wrong

What Went Well

  • Record execution: Record deliveries and energy storage deployments drove record revenue and free cash flow; cash/investments increased by $4.9B QoQ to $41.65B.
  • AI leadership narrative strengthened: “Tesla really is the leader in real-world AI… with the highest intelligence density in the car,” and FSD v14 deployment plus Robotaxi expansion reinforce the AI monetization path.
  • Energy profitability: Energy Generation & Storage achieved record gross profit of $1.1B with continued ramp at Megafactory Shanghai; new Megablock architecture simplifies utility-scale deployments.

What Went Wrong

  • Tariff and cost headwinds: Management cited tariff impacts in excess of $400M split between auto and energy; operating expenses rose (AI/R&D, restructuring, legal), compressing YoY operating margin to 5.8% from 10.8%.
  • Lower regulatory credits and one-time FSD revenue YoY: Reduced regulatory credit revenue and lower one-time FSD recognition versus Q3’24 weighed on profitability.
  • Higher average cost per vehicle: Lower fixed-cost absorption for certain models, increased tariffs, and mix pressures raised average cost per vehicle, partially offset by lower raw-material costs.

Financial Results

P&L and Cash Flow (Quarterly)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenues ($USD Billions)$25.18 $19.34 $22.50 $28.10
GAAP Diluted EPS ($)$0.62 $0.12 $0.33 $0.39
Non-GAAP Diluted EPS ($)$0.72 $0.27 $0.40 $0.50
GAAP Gross Margin (%)19.8% 16.3% 17.2% 18.0%
Operating Margin (%)10.8% 2.1% 4.1% 5.8%
Adjusted EBITDA ($USD Billions)$4.665 $2.814 $3.401 $4.227
Cash from Operations ($USD Billions)$6.255 $2.156 $2.540 $6.238
Free Cash Flow ($USD Billions)$2.742 $0.664 $0.146 $3.990
Cash & Investments ($USD Billions)$33.65 $36.996 $36.782 $41.65

Results vs S&P Global Consensus (Q3 2025)

MetricConsensusActualSurprise
Revenue ($USD Billions)$26.70*$28.10 +$1.39B; +5.2%*
Primary EPS ($)$0.559*$0.50 -$0.059; -10.6%*
# of EPS Estimates27*——*
# of Revenue Estimates28*——*
Values retrieved from S&P Global.*

Segment Revenue Breakdown

Segment ($USD Billions)Q3 2024Q1 2025Q2 2025Q3 2025
Automotive Revenues$20.02 $13.97 $16.66 $21.21
Energy Generation & Storage$2.38 $2.73 $2.79 $3.42
Services & Other$2.79 $2.64 $3.05 $3.48

Operational KPIs

KPIQ1 2025Q2 2025Q3 2025
Production (Units)362,615 410,244 447,450
Deliveries (Units)336,681 384,122 497,099
Storage Deployed (GWh)10.4 9.6 12.5
Supercharger Stations7,131 7,377 7,753
Supercharger Connectors67,316 70,228 73,817
Global Vehicle Inventory (Days)22 24 10

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapExFY 2025Not specified“Around $9B” for 2025; substantial increase in 2026 New detail
Robotaxi Markets2025Austin pilot; testing in other cities Operate in ~8–10 metro areas by YE25; no safety drivers in parts of Austin within months Raised/expanded
Safety Drivers (Austin)2025Not specifiedRemove safety drivers within months New
Lithium Refinery (TX)Q4 2025 startOn track 2025 Begin production in Q4 2025 Clarified timing
LFP Lines (NV)Q1 2026 startDomestic LFP cell production “later this year” (2025) Begin production Q1 2026 Deferred
Cybercab Volume Production2026Volume production starting 2026 Maintained: on schedule for 2026 Maintained
Semi Production Ramp2026Volume production next year Building complete; equipment install; online builds 1Q; ramp in Q2; real volume back half of year Clarified
Megapack 3 (Houston)2026Not specifiedProduction begins 2026; up to 50 GWh/year capacity New
AI Training Compute202567k H100 equivalents 81k H100 equivalents Raised
LiquidityOngoingSufficient to fund roadmap Sufficient; maintain strong balance sheet amid uncertainty Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Technology InitiativesRobotaxi pilot in Austin; FSD (Supervised) launched in China; training compute at 67k H100 equivalents; autonomous factory outbound driving FSD v14 deployment; Robotaxi expansion to Bay Area; AI training compute at 81k H100 equivalents; AI5 chip design with Samsung and TSMC; “highest intelligence density” Accelerating scope and specificity
Supply Chain/Tariffs/MacroEmphasis on tariff exposure and uncertain trade policy; localized manufacturing; domestic battery materials >$400M tariff impact; continued localization; lithium refinery timing clarified Persistent headwinds; mitigation in progress
Product PerformanceNew Model Y ramp across all factories; refreshed models; strong test drives; entry into India Record deliveries; Model Y Standard/Performance; Model YL in China; regional records (e.g., SK, Taiwan, Japan) Broadening lineup and demand
Regional TrendsChina/APAC records; Europe best-sellers; FSD approvals pending APAC/China strong; Europe/Middle East best-sellers; ongoing regulatory prep for FSD Continued strength
Regulatory/LegalFSD regulatory expansion goals; general outlook statements Detailed path to safety driver removal; multi-metro regulatory rollouts More tangible milestones
R&D Execution/OpExElevated AI/R&D spend; restructuring in Q1–Q2 OpEx up on AI equity awards; restructuring convergence of AI chip design; BTC mark-to-market effects Higher investment intensity
Energy BusinessPowerwall records; Megafactory Shanghai ramp starting Record energy deployments; Megablock & Megapack 3 roadmap; Houston 2026 capacity Scaling with new products

Management Commentary

  • “Tesla really is the leader in real-world AI… the highest intelligence density… at the beginning of scaling… Full Self-Driving and robotaxi” (Elon Musk).
  • “We expect to have no safety drivers in at least large parts of Austin by the end of this year… operate robotaxi in 8–10 metro areas by the end of the year” (Elon Musk/Ashok).
  • “AI5… by some metrics, 40 times better than AI4… focus both TSMC and Samsung… aim for oversupply of AI5 chips” (Elon Musk).
  • “Automotive margins, excluding credits, increased marginally from 15% to 15.4%… tariff impacts for Q3… in excess of $400 million” (Vaibhav Taneja).
  • “Record free cash flow of approximately $4 billion… total cash and investments over $41 billion… CapEx around $9B for the current year; substantially higher in 2026” (Vaibhav Taneja).

Q&A Highlights

  • Unsupervised FSD/Robotaxi rollout: Safety driver removal in Austin within months; expansion to 8–10 metros contingent on regulators; cautious staged approach with initial safety occupants in new markets.
  • AI5 chip and fab partners: Dual-track with Samsung (Texas) and TSMC (Arizona) to ensure oversupply; significant performance-per-watt and performance-per-dollar ambitions.
  • Vehicle capacity and Cybercab: Path to ~3M annualized capacity within ~24 months as autonomy confidence rises; Cybercab optimized for autonomous operations without wheel/pedals.
  • Semi timeline: Building complete; equipment installing; online builds in 1Q; ramp in Q2; volume in back half of the year; autonomy to extend to Semi after passenger vehicles.
  • Optimus: Engineering/manufacturing complexity centered on hand/forearm; production-intent prototype target Q1; roadmap to million-unit lines.

Estimates Context

  • Q3 2025 revenue beat: Reported $28.10B vs S&P Global consensus ~$26.70B; EPS miss: non-GAAP diluted $0.50 vs consensus ~$0.559. 27 EPS and 28 revenue estimates underpin consensus. Revenue strength likely drives upward estimate revisions in Energy and Services, while tariff and OpEx intensity may temper EPS revisions. * Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue beat with strong volumes and record energy deployments; free cash flow inflected to a record $3.99B, bolstering $41.65B cash/investments.
  • Margin trajectory improved sequentially (gross 18.0%, operating 5.8%), but YoY remains compressed; tariff impacts (> $400M) and rising AI/R&D OpEx will be key watch items into Q4.
  • Robotaxi/FSD timelines are becoming concrete (Austin safety driver removal within months; 8–10 metros by YE25), an emerging catalyst for demand and future software/services monetization.
  • AI5 chip strategy (Samsung + TSMC) aims to ensure supply and economics for inference/training, reinforcing Tesla’s vertically integrated AI stack advantage narrative.
  • Energy business scaling with record gross profit and new products (Megablock/Megapack 3), positioning for grid-scale demand and potential 2026 Houston capacity up to 50 GWh.
  • Near-term operational resilience: inventory days dropped to 10; broad regional strength (APAC, Europe best-sellers).
  • Medium-term thesis: Autonomy-driven demand lift (FSD v14, reasoning roadmap), expanding AI/robotics (Optimus, Semi) and diversified profit pools (software, fleet services, energy) offsetting hardware margin pressures. 
Notes:
- Financial results, operations, and management commentary are sourced from Tesla’s Q3 2025 8-K update and earnings call. **[1318605_0001628280-25-045861_exhibit991.htm:1]** **[1318605_0001628280-25-045861_exhibit991.htm:2]** **[1318605_0001628280-25-045861_exhibit991.htm:3]** **[1318605_0001628280-25-045861_exhibit991.htm:4]** **[1318605_0001628280-25-045861_exhibit991.htm:5]** **[1318605_0001628280-25-045861_exhibit991.htm:6]** **[1318605_0001628280-25-045861_exhibit991.htm:8]** **[1318605_0001628280-25-045861_exhibit991.htm:10]** **[1318605_0001628280-25-045861_exhibit991.htm:11]** **[1318605_0001628280-25-043530_exhibit991111.htm:0]** **[0001318605_2196700_1]** **[0001318605_2196700_4]** **[0001318605_2196700_5]** **[0001318605_2196700_6]** **[0001318605_2196700_9]** **[0001318605_2196700_10]** **[0001318605_2196700_11]** **[0001318605_2196700_12]** **[0001318605_2196700_16]** **[0001318605_2196700_18]**
- Prior quarter comparisons use Q1 and Q2 2025 8-K updates. **[1318605_0001628280-25-018851_exhbit991.htm:1]** **[1318605_0001628280-25-018851_exhbit991.htm:2]** **[1318605_0001628280-25-018851_exhbit991.htm:3]** **[1318605_0001628280-25-018851_exhbit991.htm:10]** **[1318605_0001628280-25-018851_exhbit991.htm:11]** **[1318605_0001628280-25-035738_exhibit991.htm:2]** **[1318605_0001628280-25-035738_exhibit991.htm:3]** **[1318605_0001628280-25-035738_exhibit991.htm:10]** **[1318605_0001628280-25-035738_exhibit991.htm:11]**
- S&P Global consensus figures (marked with asterisks) are used for estimate comparisons. Values retrieved from S&P Global.*