Musk's Tesla revenue beats estimates as deliveries rebound, energy storage grows

Elon Musk's Tesla beat Wall Street estimates for third-quarter revenue on ​Wednesday as a rebound in vehicle deliveries and growth in its energy ​storage unit lifted sales, even as heavy spending on AI ‌and ​robotaxis weighed on profit.

Its shares rose more than 1% in extended trading. The Austin, Texas-based automaker reported revenue of $28.05 billion for the three months ended September 30, compared with analysts' average estimate of $27.88 billion, according to data compiled by LSEG. Revenue was $28.10 billion in ‌the year-earlier quarter.

Capital expenditure in the third quarter came in at $4.73 billion, compared with the expectation of about $7.5 billion. That compares with $5.79 billion in the second quarter and $2.25 billion a year earlier. Free cash flow in the September quarter came in at $1.53 billion, compared with an expectation of cash burn of $4.92 billion.

Tesla delivered 486,532 vehicles in the third quarter, beating Wall Street expectations ‌of about 461,100 vehicles. Deliveries were down about 2% from a year earlier. Deliveries outpaced production of 464,391 vehicles by more than 22,000 for a second straight quarter, resulting ‌in an inventory drawdown. Wall Street expects about 1.77 million for 2026, according to Visible Alpha data.

Model 3 and Model Y made up nearly all deliveries. Other models including the Cybertruck accounted for just 8,295, down from 12,364 deliveries in the second quarter. Tesla has stopped production of the Model S and Model X vehicles in Fremont and is replacing production lines with its first large-scale Optimus line. Its core automotive business remains ⁠under scrutiny ​as rivals globally launch newer, often cheaper models, ⁠while Tesla leans heavily on the aging Model 3 and Model Y. It has said it passed 10 million vehicles delivered and that Model Y is on track to be the world's best-selling vehicle this year.

To ⁠stimulate demand, Tesla has offered stripped-down, cheaper versions of both models and launched a six-seater Model Y in the United States in July. However, US demand has been hit by the removal of ​tax credits last year. Results come as Wall Street weighs a possible merger with SpaceX. The companies have formed special committees to discuss a deal, Musk said ⁠on Tuesday.

Investors have been keen to see clearer evidence that Musk's push into self-driving and robotics is moving from promise to commercial reality. Tesla said earlier this month that its Cybercab fleet in Austin had grown from ⁠fewer ​than 40 vehicles to more than 300 in about a month, with Dallas next. It launched unsupervised robotaxi rides in Miami, Orlando and Tampa in July, after Dallas and Houston in April.

Tesla's energy unit has become a key counterweight to the auto business, helped by demand for grid-scale batteries from renewable-power developers and data centers. Tesla has said ⁠the current tariff regime will hit its energy business harder than its auto business. Tesla won approval in April to deploy Full Self-Driving (Supervised) in the Netherlands, and some other ⁠European countries have since followed. A key vote ⁠on Europe-wide approval was expected later this year. The company agreed to change the name in Europe to Tesla Assisted Driving.

The company's shares have fallen about 14% this year. At roughly $1.4 trillion, it remains the world's most valuable automaker by a wide margin, ‌reflecting investor expectations that self-driving software, ‌energy storage, robotaxis and humanoid robots could eventually deliver higher-margin growth than vehicle sales.