Tesla revenue beats estimates as deliveries rebound but AI spending weighs on profit

Elon Musk’s Tesla beat Wall Street estimates for third-quarter revenue on Wednesday as a rebound in vehicle deliveries and growth in its energy storage unit lifted sales, even as heavy spending on AI and robotaxis weighed on profit.Its shares rose more than 1% in extended trading.The Austin, Texas-based automaker reported revenue of $28.05 billion for the three months ended Sept.30, compared with analysts’ average estimate of $27.88 billion, according to data compiled by LSEG.

Revenue was $28.10 billion in the year-earlier quarter.Capital expenditure in the third quarter came in at $4.73 billion, compared with the expectation of about $7.5 billion.That compares with $5.79 billion in the second quarter and $2.25 billion a year earlier.Free cash flow in the September quarter came in at $1.53 billion, compared with an expectation of cash burn of $4.92 billion.Tesla delivered 486,532 vehicles in the third quarter, beating Wall Street expectations of about 461,100 vehicles.

Deliveries were down about 2% from a year earlier.Deliveries outpaced production of 464,391 vehicles by more than 22,000 for a second straight quarter, resulting in an inventory drawdown.Wall Street expects about 1.77 million for 2026, according to Visible Alpha data.Model 3 and Model Y made up nearly all deliveries.

Other models including the Cybertruck accounted for just 8,295, down from 12,364 deliveries in the second quarter.Tesla has stopped production of the Model S and Model X vehicles in Fremont and is replacing production lines with its first large-scale Optimus line.Its core automotive business remains under scrutiny as rivals globally launch newer, often cheaper models, while Tesla leans heavily on the aging Model 3 and Model Y.

It has said it passed 10 million vehicles delivered and that Model Y is on track to be the world’s best-selling vehicle this year.To stimulate demand, Tesla has offered stripped-down, cheaper versions of both models and launched a six-seater Model Y in the...