Tesla’s document gross sales quarter gave the corporate a reprieve after a horrible begin to 2025. However CEO Elon Musk is targeted on constructing an “military of robots” to ship on the long-unmet promise of self-driving automobiles. It is a process he might want to accomplish if he’s to unlock the total $1 trillion compensation bundle that Tesla is giving him.
The stress between Tesla’s present car-driven enterprise and the AI-centric enterprise Mr. Musk is aiming for has by no means been clearer.
Tesla delivered a document variety of automobiles within the third quarter of 2025. This was largely resulting from a rush of U.S. prospects making the most of the expiring federal EV tax credit score. Nonetheless, this document quarter didn’t translate into elevated income. In actual fact, Tesla’s third-quarter income had been nonetheless down 37% in comparison with the identical interval final 12 months.
Tesla shipped 497,099 automobiles within the third quarter, producing $21.2 billion in auto income. That is the corporate’s highest income in additional than a 12 months. However Tesla made solely $1.4 billion in revenue, simply $200 million greater than the second quarter of this 12 months, in line with a letter to shareholders launched Wednesday. The document quarter comes after a disastrous begin to the 12 months for Tesla, which noticed gross sales plummet due partially to Musk’s involvement within the Trump administration.
The corporate mentioned within the letter {that a} vital enhance in working bills (up 50% in comparison with the third quarter of final 12 months) was one of many causes. This enhance in working bills was pushed by spending on AI and different analysis and improvement tasks, in addition to roughly $240 million in “restructuring” expenses. Tesla has not defined the aim of those restructuring expenses, however they might be associated to the corporate’s latest resolution to finish its six-year-old Dojo supercomputer venture.
Tesla cited the tariffs as an element that additional weighed on income within the quarter, with Mr. Musk spending about $300 million to assist his presidential bid, which harm the corporate’s outcomes. Tesla Chief Monetary Officer Vaibhav Taneja mentioned in a convention name Wednesday that the affect of the tariffs could be about $400 million.
“We’re at a important inflection level for Tesla and our future technique as we carry AI into the actual world,” Musk mentioned on a convention name. Tesla is now “basically altering the character of transportation with the large growth of totally autonomous driving and robotaxis,” he mentioned.
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All of this can put much more stress on the corporate within the last quarter of the 12 months.
Tesla already wants a document quarter (and a number of other extra) if it needs to easily match its 2024 or 2023 automotive shipments. The corporate may get some assist from new, barely cheaper, feature-simplified EVs within the Mannequin 3 and Mannequin Y. However even in that best-case situation, Tesla is way from the 50% year-over-year progress trajectory it as soon as promised buyers and shareholders.
However Mr. Musk has spent the previous couple of years making an attempt to get shareholders, buyers, staff and everybody else to look past the corporate’s core enterprise of creating and promoting automobiles. He’s betting Tesla’s future on its potential to construct an enormous community of self-driving automobiles to compete with Uber. And he thinks the humanoid robotic Optimus would be the best-selling product of all time.
Tesla supplied little new details about these applications in Wednesday’s letter. Musk mentioned on a convention name that Tesla may start manufacturing the third model of Optimus within the first quarter of 2026. Musk beforehand promised to construct 1000’s of robots by the tip of this 12 months, however as The Info reported, Tesla bumped into issues with preliminary manufacturing of Optimus.
“To be clear, bringing Optimus to market is an extremely troublesome process. It isn’t a stroll within the park,” Musk mentioned.
However Musk continued to make Tesla’s bland and unspecific claims about how a lot Optimus would change the world. “We are able to truly create a world with out poverty, a world the place everybody has entry to one of the best well being care,” he says. “Optimus would make an ideal surgeon.”
Tesla’s elevated give attention to AI, robotics and self-driving automobiles (together with the beginning of manufacturing of its two-seater CyberCab) can even additional enhance Tesla’s prices subsequent 12 months. Taneja mentioned capital spending will enhance “considerably” in 2026 thanks to those tasks. He additionally mentioned Tesla wants to extend employee-related spending to stay aggressive within the ongoing AI expertise struggle.
Tesla’s third-quarter outcomes had been launched on the again of the corporate’s proposal to promote $1 trillion value of inventory to Musk. The plan will likely be voted on at Tesla’s annual shareholder assembly within the coming weeks. The corporate and Mr. Musk are actively campaigning. Though advisory teams like ISS and Glass Lewis have really useful in opposition to the pay bundle, the invoice is probably to go given the overwhelming assist from shareholders for efforts up to now.
Nonetheless, Musk threatened to tug out of Tesla if the bundle was not permitted.
On Wednesday’s convention name, he reiterated his declare that he values the voting management his compensation bundle gives greater than the cash.
“It is disgusting to construct a military of robots right here after which get kicked out due to some crappy suggestions from the ISS and Glass Lewis that they don’t have any clue about. In order that they’re company terrorists,” Musk mentioned.
This text has been up to date with new info from Tesla’s third quarter convention name.
