Tesla's profit fell in third quarter even as sales rose. Musk sees
robotaxi expansion by year end
[October 23, 2025] By
BERNARD CONDON
NEW YORK (AP) — Tesla reported a fourth straight decline in quarterly
profit even as sales rose, triggering a drop in its shares in
after-hours trading.
The car company run by Elon Musk reported third-quarter earnings plunged
37% to $1.4 billion, or 39 cents a share, from $2.2 billion, or 62 cents
a share, a year earlier. That marked the fourth quarter in a row that
profit dropped. And even the revenue rise, a welcome relief from a sales
plunge earlier in the year due to anti-Musk boycotts, came with
significant caveat: Customers rushed to take advantage of a $7,500
federal EV tax credit before it expired on Oct. 1, possibly stealing
sales from the current quarter.
Tesla shares fell 3.5% in after-hours trading.
In a conference call with investors Musk sought to shift attention away
from selling cars to other businesses: its driverless robotaxi service,
its AI product and its Optimus robots for the home and factories.
“It’ll seem so real, that you’ll need to poke it,” he said of the
Optimus, predicting what he called a “robot army” will likely become
"the biggest product of all time.”
Musk also said he was confident enough in the robotaxi to remove “safety
monitors” from the driver's seat by the end of the year in its first
market, Austin, Texas. He added that the service, which is also
available in San Francisco, will roll out to as many as 10 other metro
areas also by the end of the year.
The revenue surge, to $28.1 billion from $25.2 billion, was not
unexpected. Musk had announced earlier this month that sales of electric
vehicles, one part of the multipronged business, rose 7% in the quarter
after plunging for most of the year.
Tesla was also helped by surging sales from its separate battery storage
and electric charging businesses, but the EVs still make up much of the
overall revenue figures.
“It's a positive that they are increasingly diversifying from the auto
business, but our primary concern is demand for EVs,” said Garrett
Nelson, an analyst at CFRA Research who has a “sell” rating on the
stock. “There’s a lot of uncertainty.”
[to top of second column] |
Tesla vehicles line a parking area at the company's Fremont, Calif.,
factory on Tuesday, Aug. 5, 2025. (AP Photo/Noah Berger, File)
 A closely watched measure, gross
margins, hit 18%, the highest for this year but still declinedc from
the third quarter a year ago. The figure, which shows how much money
Tesla makes after paying staff, raw materials and other basic
expenses, is also down from 25% four years ago as the company offers
discounts and other incentives to fight back against rival EV makers
that have been stealing market share.
Earnings excluding certain charges, fell to 50
cents per share from 72 cents per share a year ago and below the 56
cents forecast by Wall Street analysts.
Musk was predicting 20% to 30% sales growth for 2025 at this time
last year, but it hasn't turned out that way.
In addition to alienating potential customers with his embrace of
right-wing politicians, sparking boycotts in key markets in the U.S.
and abroad, he also has failed to shake up his vehicle lineup with a
new, exciting model or introduce a substantially cheaper car to
appeal to more buyers.
When he finally did reveal two cheaper offerings earlier this month
— stripped down versions of the Model Y and Model X — investors were
unimpressed because the discount didn’t seem deep enough. They both
cost slightly less than $40,000, much higher than expected.
One Musk watcher on Wall Street was undeterred by the quarterly
report.
“It’s nice to have revenue come back,” said Brian Mulberry, a senior
client portfolio manager at Zacks Investment Management. “There is
still strong demand for Teslas.”
All contents © copyright 2025 Associated Press. All rights reserved
 |
