TLDR
- Tesla stock gains 3.41% to $386.47 despite a 56% drop in Q3 operating profit.
- Tesla Q3 revenue holds near $28B, but operating earnings plunge 56% year over year.
- Tesla’s cash reserves reach $45.4B after generating $1.5B in free cash flow.
- Vehicle deliveries slip 2% in Q3 as Tesla faces continued battery supply limits.
- Tesla FSD subscriptions surge 67% as Cybercab begins Robotaxi rides in Austin.
Tesla reported a sharp decline in third-quarter operating profit despite maintaining revenue above $28 billion and expanding its cash reserves. The electric vehicle maker also increased production, although deliveries fell and battery shortages limited further growth. Meanwhile, Tesla (TSLA) stock surged 3.41% to $386.47, gaining $12.76, before rising another 1.07% to $390.61 after hours.
Tesla Q3 Revenue Reaches $28 Billion as Operating Profit Falls 56%
Tesla reported third-quarter 2026 revenue of $28.046 billion, compared with $28.095 billion during the same period last year. However, operating income dropped 56% to $718 million, reducing its operating margin to 2.6%. GAAP diluted earnings per share also declined to $0.22 from $0.39 a year earlier.
Despite weaker earnings, Tesla increased gross profit to $5.494 billion from $5.054 billion in the previous year. Meanwhile, research and development spending climbed to $2.761 billion as the company expanded artificial intelligence and robotics projects. Total operating expenses reached $4.776 billion, compared with $3.430 billion in the third quarter of 2025.
Tesla generated $6.3 billion in operating cash flow and recorded $1.5 billion in free cash flow. Consequently, cash and short-term investments increased by $1.9 billion sequentially to $45.4 billion. Services and other revenue also grew to $4.605 billion, helping offset weaker automotive and energy revenue.
Tesla Vehicle Deliveries Decline as FSD Subscriptions Jump 67%
Tesla produced 464,391 vehicles during the quarter, representing a 4% increase from the previous year. However, deliveries declined 2% to 486,532 vehicles, despite strong demand across several markets. The company attributed its limited vehicle volume growth partly to battery availability constraints.
Model 3 and Model Y deliveries reached 478,237 units, while other models contributed 8,295 deliveries. Meanwhile, active Full Self-Driving subscriptions and upfront purchases increased 67% annually to 1.74 million. Tesla also reported an FSD attach rate exceeding 75% among new vehicle deliveries in North America.
The company expanded its autonomous driving operations by introducing Cybercab rides in Austin on September 3. Cumulative unsupervised Robotaxi miles increased eightfold compared with the previous quarter. Tesla also completed its 10 millionth vehicle milestone and reported record production at Gigafactory Berlin.
Tesla Expands Energy Storage and Robotics Operations
Tesla deployed 13.7 GWh of energy storage during the quarter, marking a 10% annual increase. Meanwhile, Megafactory Texas began production with planned annual manufacturing capacity of 50 GWh. The company also reported record energy storage orders and backlog amid growing demand from data centers.
Tesla continued expanding its manufacturing operations while preparing new products for commercial production. The company began Tesla Semi production in Nevada and Optimus robot production in Fremont. Tesla unveiled its next-generation Roadster on October 15 as part of its broader product expansion.
Tesla plans to increase factory utilization while securing additional battery supplies to support production growth. The company also expects software, autonomous driving, and robotics operations to contribute more to future profitability. However, its latest results highlight a widening gap between revenue stability and operating earnings despite stronger cash generation.
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