Tesla’s document quarter of gross sales provided the corporate a reprieve after a dismal begin to 2025. However CEO Elon Musk is concentrated on constructing a “robotic military” and fulfilling his years-long unfulfilled promise of autonomous automobiles – duties he wants to perform if he needs to unlock the complete worth of the $1 billion compensation bundle Tesla intends to award him.
The stress between Tesla’s present automobile enterprise and the AI-centric enterprise that Musk goals for has by no means been clearer.
Tesla delivered a document variety of automobiles within the third quarter of 2025, thanks largely to a surge of shoppers in the USA who took benefit of the expiring federal tax credit score for electrical automobiles. However that document quarter did not result in greater income. The truth is, Tesla’s third-quarter revenue was nonetheless 37% decrease than the identical quarter final yr.
Tesla offered 497,099 automobiles within the third quarter, producing $21.2 billion in automotive income – the corporate’s greatest income determine in additional than a yr. However Tesla solely made a revenue of $1.4 billion, a rise of simply $200 million from the second quarter of this yr, in keeping with a letter to shareholders. released Wednesday. The document quarter got here after a dismal begin to the yr for Tesla, which noticed gross sales drop sharply, partially as a result of Musk’s involvement with the Trump administration.
The corporate defined within the letter that a big enhance in working bills – 50% greater in comparison with the third quarter of final yr – was one of many culprits. This enhance in working bills was as a result of spending on AI and different R&D initiatives, in addition to “restructuring” fees of almost $240 million. Tesla didn’t clarify what these restructuring bills had been for, however they’re probably associated to the corporate’s latest determination to shut the corporate’s six-year-old Dojo supercomputer challenge.
Tesla cited tariffs as one other drag on income final quarter, that means Musk spent about $300 million to assist elect a president who damage the corporate’s enterprise. Tesla Chief Monetary Officer Vaibhav Taneja mentioned in a convention name on Wednesday that the affect on tariffs was about $400 million.
“We’re at a essential inflection level for Tesla and our future technique as we deliver AI into the actual world,” Musk mentioned on the decision. Tesla is on the “starting of increasing, fairly massively, Full Self-Driving and Robotaxi, and basically altering the character of transportation,” he mentioned.
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All of this may put much more stress on the corporate’s final quarter of the yr.
Tesla already wants one other document quarter (after which some) if it needs to easily match the variety of automobiles it offered in 2024 or 2023. The corporate might get assist from new, barely cheaper, streamlined variations of the Mannequin 3 and Mannequin Y EVs. However even on this best-case situation, Tesla is a good distance off the trail to the 50% year-over-year progress it as soon as promised traders and shareholders.
However Musk has spent the previous few years making an attempt to get shareholders, traders, workers and everybody else to look past the corporate’s core enterprise of creating and promoting automobiles. He wager Tesla’s future would be capable of create an unlimited community of autonomous automobiles that he believes might problem Uber. And he thinks the humanoid robotic Optimus will turn into the best-selling product of all time.
Tesla provided little new details about these applications in Wednesday’s letter. Musk mentioned on the decision that Tesla might start constructing the third model of Optimus within the first quarter of 2026. He had beforehand promised to construct hundreds of robots by the top of this yr, however as The Info reported, Tesla has experience problems at the start of production with Optimus.
“Bringing Optimus to market is an extremely troublesome job, to be clear. It is no stroll within the park,” Musk mentioned.
However Musk continued Tesla’s imprecise and nonspecific claims about how a lot Optimus will change the world. “It’s attainable to actually create a world the place there is no such thing as a poverty, the place everybody has entry to the very best medical care,” he mentioned. “Optimus might be an unbelievable surgeon.”
The elevated deal with AI, robotics and self-driving automobiles (together with the beginning of manufacturing of the two-seater “Cybercab”) may even value Tesla extra subsequent yr. Taneja mentioned capital expenditure will enhance “considerably” in 2026 thanks to those initiatives. He additionally mentioned that Tesla needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise struggle.
Tesla’s third-quarter outcomes come amid the corporate’s proposal at hand over $1 trillion in shares to Musk. This plan might be voted on at Tesla’s annual shareholder assembly in just a few weeks. The corporate – and Musk – are campaigning exhausting. Whereas groups of advisors Since ISS and Glass Lewis are recommending in opposition to the pay bundle, it is extremely probably that it’s going to move, given the overwhelming shareholder assist for earlier efforts.
That did not cease Musk from threatening to desert Tesla if the package was not approved.
On Wednesday’s convention name, he reiterated his declare that he cares extra concerning the voting management the compensation bundle would give him than the cash.
“I simply do not feel snug constructing a robotic military right here after which getting deposed due to some silly suggestions from ISS and Glass Lewis, who do not have a clue. I imply, these guys are company terrorists,” Musk mentioned.
This story has been up to date with new info from Tesla’s Q3 convention name.
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