Tesla beats estimates but profit falls; Musk lowers sales target

· Finance · United States

Tesla reported third-quarter results that beat expectations on earnings and sales, but automotive revenue declined and operating income fell 56% year over year as AI and R&D spending climbed. Profit and revenue were roughly flat to lower, with the carmaker framing the shift as a pivot from electric vehicles toward AI. Chief Executive Elon Musk set a lower sales target for the company and gave no new details on a possible Tesla-SpaceX merger, which investors had flagged as the biggest open question ahead of the call. He said he expects to begin shipping Optimus robots to customers by the end of 2027. The stock fell after the results, with some analysts questioning whether a SpaceX combination would serve shareholders. Tesla also posted video of its robotaxis avoiding rival vehicles from Waymo and Avride.

Why it matters：Tesla's shrinking auto profit and AI-heavy cost base test whether investors will value it as a technology company rather than a carmaker, a shift that affects EV supply chains and rival automakers.

Key points

  • Operating income fell 56% year over year on higher AI and R&D costs.
  • Musk expects Optimus deliveries to customers to start by end-2027.
  • No new details were offered on a potential SpaceX merger.

Sources (original reporting)

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