Tesla stock rebound or decline
What’s happening:-
Shares of Tesla fell in after-hours trading on Wednesday following the release of the company’s third-quarter results.
What happened:-
The electric vehicle company posted better-than-expected revenues for the latest quarter, topping estimates after four consecutive misses.
However, Tesla failed to meet expectations for earnings, missing estimates for the fourth straight quarter.
How were the results:-
- The Austin, Texas-based company reported low double-digit revenue growth for the third quarter.
- Revenues grew 12% year-over-year to $28.095 billion, beating consensus estimates of $26.239 billion.
- Earnings came in at 50 cents per share, missing Wall Street expectations of 54 cents per share.
Tesla's profits decline in the third quarter of 2025
Why it matters:-
Tesla posted record revenues for the third quarter as customers in the US rushed to lock in EV tax credits before their expiry in September. The US government has now eliminated the $7,500 EV federal tax credit, which had provided a major boost to the demand for electric vehicles so far.
Tesla had previously reported 497,099 vehicle deliveries for the third quarter, hitting a new record.
Tesla said its revenue growth in the latest quarter was driven by gains in delivery, energy, and services, offset slightly by lower regulatory credit revenue.
Automotive revenue rose 6% year-over-year to $21.21 billion in the quarter. Operating income shrunk by 40% to $1.6 billion, with operating margins coming in at 5.8%.
Tesla said it has enough liquidity to provide funding to its product roadmap and for its long-term plans of increasing capacity.
The EV maker also said that its Cybercab, Tesla Semi and Megapack 3 are on course for volume production next year.
“We believe our scale and cost structure will enable us to navigate the shifting market dynamics across the globe more efficiently than our peers, with advances in AI making our products the most compelling in the market,” the company said in a statement.
Tesla's profits decline
How shares responded:-
Shares of Tesla fell 3.8% to $422.27 in after-hours trading on Wednesday. The stock has jumped more than 84% over the past six months.
What to watch:-
Investors will continue monitoring Tesla’s upcoming products, including the Model Y Performance, Model YL, and the affordable Model 3 and Model Y Standard vehicles.
High Costs Due to Customs Tariffs
On the other hand, Vibhav Taneja, the company's chief financial officer, confirmed that customs duties imposed on imported auto parts and raw materials cost Tesla more than $400 million during the third quarter. He noted that these expenses will continue to rise in the coming period.
Expansion Policy
Furthermore, during the third quarter, the company announced the launch of a six-seat version of the Model Y, which has been a huge success in China. It also offered financing and insurance incentives, including five-year interest-free loans, to attract customers.
In October 2025, Tesla unveiled cheaper versions of the Model 3 and Model Y in the US market. These models were priced $5,000 lower than previous versions, boosting sales after federal incentives ended.
However, this move failed to convince investors. Tesla's shares continued to decline due to what analysts described as a lack of innovation and weak pricing.