Tesla Q3 Financial Report: Revenue Flat Year-over-Year, Net Profit Down 43%, Operating Expenses Surged 39%

Tesla released its Q3 2026 financial results early this morning Beijing time, reporting $28.046 billion in revenue, nearly flat year-over-year. Net income attributable to common shareholders stood at $787 million, down around 43% YoY, with GAAP diluted earnings per share of $0.22, lower than $0.39 in the year-ago period. Operating profit fell about 56% YoY to $718 million, with an operating margin of 2.6%, down 3.2 percentage points YoY. The decline was mainly driven by a sharp increase in spending on R&D, AI, robots and other areas (operating expenses rose around 39%). Overall GAAP gross margin rose to 19.6%, up around 1.6 percentage points YoY and also significantly higher than the previous quarter. The automotive gross margin, excluding regulatory credits, was around 18.1%, showing notable improvement compared to both the previous quarter and the same period last year. The company delivered 486,500 vehicles in the quarter, down 2% YoY; production reached 464,400 units, up 4% YoY. Automotive segment revenue fell around 3% YoY, energy generation and storage revenue dropped around 16%, while services and other revenue grew around 33%. Tesla said higher R&D and other operating expenses, lower regulatory credit income, and weaker energy segment gross margins weighed on operating profit. The company’s Q3 operating cash flow was $6.263 billion, and free cash flow was $1.531 billion, lower than $3.99 billion in the year-ago period. Tesla noted that battery supply remains a constraint on boosting automotive production; it has also launched mass production of the Semi in Nevada, started Optimus production in Fremont, and the Cybercab has been deployed in Austin’s Robotaxi fleet. According to market data from BIT (bit.com), SPCX fell 3.32% in after-hours trading, likely impacted by the earnings report.