Tesla, Inc. (NASDAQ:TSLA) saw its stock fall more than 3% in after-hours trading after the electric vehicle maker reported third-quarter results that came in below Wall Street forecasts. Rising operating costs offset stronger sales as the company prepares for softer demand in the U.S. following the expiration of a federal EV tax credit.
For the quarter, Tesla posted adjusted earnings of $0.50 per share on $28.1 billion in revenue. Analysts had expected $0.54 per share on $26.22 billion in revenue.
Vehicle deliveries increased 7% year over year to 497,098, fueled by a rush of buyers seeking to take advantage of the now-expired $7,500 tax credit. However, higher expenses weighed on profitability. Gross margins excluding credits remained at 17%, roughly flat compared to the same period a year ago.
As competition in the EV market heats up, analysts have highlighted Tesla’s long-term bet on autonomous driving and robotaxi services as key to its future revenue growth. According to the company’s own researchers, the total opportunity from AI and autonomous technology is valued at around $1 trillion.
Tesla shared new details on these initiatives, noting that its “Cybercab” two-passenger self-driving electric vehicle, designed for its robotaxi network, is still slated to enter volume production in 2026. It also confirmed that its Optimus humanoid robot has now been officially positioned for near-term production.
“Tesla remains very well positioned, and full self-driving and robotaxi will be critical value drivers,” analysts at Stifel said in a note.
Meanwhile, analysts at Vital Knowledge pointed out that much of the market debate around Tesla focuses on “what exactly” the company is, rather than on its performance alone.
“If it’s just an auto company, then the stock is wildly overvalued […],” they wrote. “If it’s an AI/robotics/autonomous driving company, which Elon […] claims […], then the stock will continue to trade around present levels.”