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Published on
October 23, 2025
5 min read
Tesla’s Q3 Revenues Surge 12%, But Earnings Per Share Miss Market Projections
In Focus
- Tesla has missed its Q3 earnings after its profits dipped 40%
- EV maker’s stock dropped 5% in October 23, 2025 trading
- Tesla’s Q3 revenue surpassed analyst projects
Tesla has missed its third-quarter earnings per share projections. EV makers’ operating profit dipped 40% compared to the same period last year. According to Yahoo Finance, Tesla Q3 earnings miss comes soon after the expiry of EV tax credits. Tesla stock dropped over 5% on October 23, 2025.
Tesla Q3 Revenue Rise as Profit Drops
Tesla’s third-quarter revenue stood at $28.01 billion compared to $26.27 billion projected by analysts. This represents a 12% increase from the $25.18 billion generated the same period last year.
Tesla announced $0.50 earnings per share, which is slightly lower than the estimated $0.50. Despite the increase in revenue, Tesla’s profit declined 40% to $1.624 billion year-on-year. The company attributed the profit drop to the reduction in regulatory emissions credit revenue.
At the beginning of this month, Tesla released standard versions of its Model 3 and Model Y vehicles in a bid to unlock demand. The EV maker’s Q3 earnings report came as the stock markets hit new highs after navigating the tariff war that has characterized the U.S. President Donald Trump’s second term.
Impact of Import Tariffs on Tesla’s Q3 Performance
Tesla reported that it took a $400 million tariff hit in the quarter under review compared to $300 million in the second-quarter. In the U.S, a 25% tariff on imported cars and vehicle parts remains effective and continues to affect local automakers.
“Both deliveries and free cash flow were all-time records, but admittedly, this backdrop didn’t translate into as much upside as we had expected. Headwinds included tariffs, mix, restructuring, and a higher tax rate,” Piper Sandler Analyst Alexander Potter wrote in a note.
At the beginning of this month, Tesla’s vehicle deliveries record surged after the company sold 497,099 units. This volume surpassed analysts estimates of about 439,800 units. Tesla experienced the sales surge right before the federal EV tax credits expired on September 30, 2025. The EV maker hiked lease prices across its U.S. lineup soon after Tesla’s regulatory credits fell.
Tesla Q3 Earnings at a Glance:
- Tesla’s Q3 revenue rose 12% from $25.18 billion a year ago
- Tesla announced $0.50 earnings per share against the projected $0.54
- EV maker took a $400 million tariff hit in Q3
- Tax credit expiry affected Tesla’s profitability in the third-quarter
- Tesla plans to expand robotaxis to other metro areas by close of 2025
Musk’s Robotaxi Update to Investors
Tesla CEO Elon Musk gave investors an update of the company’s robotaxi progress. Noting that the EV maker had launched the ride-hailing service in the Bay Area, Musk said the company plans to commence robotaxi tests in 8 to 10 metro areas in Florida, Nevada, and Arizona by the end of the year.
“We are expecting to have no safety drivers in large parts of Austin by the end of this year. We are being very cautious about the deployment,” Musk said during the earnings call.
Tesla started Model Y tests in Austin, Texas in May 2025 before expanding to the Bay Area several weeks later. However, each robotaxi comes with a safety driver. These tests coupled with Tesla’s comments about expanding deployment in a month of two confused regulators.
Growing Regulatory Scrutiny
In recent months, Tesla’s AI mobility strategy has increasingly come under regulator scrutiny. Earlier this month, the U.S. auto safety agency NHTSA said it will investigate Tesla’s FSD over traffic violations. The investigation focuses on 2.88 million Tesla EVs that operate on the company’s Full Self-Driving system.
“The company is hyper-aware of media sensitivity and potential regulatory backlash if anything goes wrong, so it is proceeding with extreme caution. The Tesla story, and valuation multiple, rely on seamless execution rolling out revolutionary technology,” Blair Analyst Jed Dorsheimer said in an investor note.
But even with the rollout challenges, some analysts believe that robotaxis hold huge potential for Tesla.
“Real-world AI remains Tesla’s ace in the hole, with the potential to unlock incalculably large markets,” Potter added.
