Tesla Q3 revenue surges 28% to $28.1 billion, but profits slip amid $400 million tariff hit

Tesla has reported record third-quarter revenue that surpassed Wall Street estimates, powered by its highest-ever vehicle sales as U.S. buyers rushed to secure federal electric vehicle (EV) tax credits before they expired last month.

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The company posted $28.1 billion in revenue for the quarter ended September 30, beating analysts’ average forecast of $26.37 billion, according to data from LSEG, Reuters quoted.

However, Tesla’s profit fell short of expectations, dented by new tariffs, soaring research and development spending, and a sharp decline in income from regulatory credits.

Chief Financial Officer Vaibhav Taneja reportedly said that tariffs imposed under the Trump administration added more than $400 million in costs during the quarter. Meanwhile, the company saw a 50% jump in operating expenses, driven by investments in AI, robotics, and other R&D initiatives, along with higher stock-based compensation. Taneja added that capital expenditures are expected to rise substantially in 2026 as Tesla accelerates work on future products.

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Tesla’s $1.45 trillion valuation continues to hinge on investor optimism around CEO Elon Musk’s pivot to AI and robotics, but traditional vehicle sales remain the company’s financial backbone while those long-term bets are developed.

Tesla has launched lower-cost “Standard” variants of its Model Y and Model 3 earlier this month, cutting prices by about $5,000 to $5,500. Despite near-term headwinds, Tesla said it remains on track to begin volume production of its Cybercab robotaxi, Semi truck, and Megapack 3 battery in 2026. Meanwhile, progress on the Optimus humanoid robot continues, with production expected to begin toward the end of 2026.

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