Tesla reported a drop in profits for the fourth consecutive quarter, despite an increase in vehicle sales in the last three months. The company, led by Elon Musk, announced third-quarter earnings of $1.4 billion, or 39 cents per share, down from $2.2 billion, or 62 cents per share, a year earlier. After adjusting for certain charges, earnings were 50 cents per share, below Wall Street’s expectation of 56 cents.
Revenue for the quarter increased to $28.1 billion from $25.2 billion in the same period last year, surpassing analysts’ forecasts. Tesla’s stock declined by 1% to $434.82 in after-hours trading.
Financial analysts had raised their revenue projections after Musk revealed that electric vehicle sales grew by 7% during the quarter, following declines earlier in the year. This growth was partly attributed to customers taking advantage of a $7,500 federal tax credit for electric vehicle purchases before it expired on October 1.
The company also benefited from increased sales in its battery storage business, although electric vehicles remain its primary revenue source.
Gross margins reached 18%, the highest level for this year but still below last year’s third-quarter figure and significantly lower than four years ago when margins were at 25%. Tesla has introduced discounts and incentives to counter growing competition from other electric vehicle manufacturers.
Musk had previously forecasted sales growth of 20% to 30% for 2025 at this time last year, but those expectations have not been met.
Musk’s support for right-wing politicians has led to boycotts in key markets domestically and internationally. The company has also not introduced new models or more affordable vehicles that could appeal to a broader market.
