In the third quarter (Q3) of 2025, Tesla achieved record global vehicle deliveries and energy storage deployments across the residential, industrial, and utility sectors, underscoring the company’s operational strength and continued global expansion.
The strong performance translated into record revenue and free cash flow generation, despite a drop in profitability due to increased research and development spending.
Tesla reported a 12% year-over-year (YoY) increase in total revenue to $28.1 billion, exceeding analyst estimates of $26.37 billion. However, earnings per share came in at 50 cents adjusted, slightly below the expected 54 cents. Automotive revenue climbed 6% YoY to $21.2 billion, up from $20 billion a year earlier, while total revenue rose from $25.18 billion in the same period last year.
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Net income, however, fell 37% to $1.37 billion, or 39 cents per share, compared with $2.17 billion or 62 cents per share a year earlier. The company attributed the decline to lower electric vehicle (EV) prices and a 50% rise in operating expenses, driven by investments in artificial intelligence (AI) and other R&D initiatives.
Tesla’s operating income dropped 40% YoY to $1.6 billion, resulting in a 5.8% operating margin. The company noted that year-over-year performance was influenced by increased vehicle deliveries, growth in energy generation and storage, expansion in services and other categories, offset by lower regulatory credit revenue and a one-time full self-driving (FSD) revenue recognition in Q3 2024 related to the Cybertruck and other advanced features.
Despite the profit squeeze, Tesla expanded its vehicle lineup in October with the Model 3 Standard and Model Y Standard, each offering over 300 miles of range and starting at $36,990 and $39,990, respectively. These new models aim to make Tesla vehicles more accessible following the expiration of the EV tax credit in the United States.
The company also launched the Model Y Performance, which accelerates from 0–60 mph in 3.3 seconds, and introduced leasing options for certified pre-owned Model 3s and Model Ys. In China, the EV giant launched the Model YL in China, a longer wheelbase version of the Model Y with 6 seats and 3 rows, expanding its product portfolio in this critical market.
Notably, Tesla achieved record deliveries in South Korea, Taiwan, Japan and Singapore and began deliveries of the Model Y in India. South Korea is now its third largest market behind only the U.S. and China, serving as validation of
the company’s competitive positioning in a robust EV market.
In the energy sector, Tesla unveiled the Megapack 3 and Megablock, next-generation battery products designed to simplify large-scale installations by reducing deployment costs and time. The company expects these innovations to strengthen its position in the renewable energy market.
Tesla emphasized that its scale, cost efficiency, and AI advancements position it to adapt to changing market conditions better than competitors. The company’s focus remains on scaling core hardware and maximizing deliveries and deployments, with each Tesla product designed to deliver increasing value through AI-driven services such as Autobidder and virtual power plant optimization.
Looking ahead, Tesla reaffirmed its commitment to integrating AI across its automotive and energy portfolios, driving toward what it calls a “future of sustainable abundance,” as outlined in its Master Plan Part IV.
With record Q3 deliveries and continued innovation across both vehicles and energy products, Tesla remains a leader in pushing the boundaries of technology, sustainability, and AI-driven mobility.