Tesla profit falls 29% as AI spending climbs, and shares slip after hours
Third-quarter revenue beat estimates, but net income fell as capital spending more than doubled.
Tesla reported third-quarter revenue of $28.05 billion on Wednesday, slightly above what analysts expected, and adjusted earnings of 48 cents a share, also ahead of estimates. Net income fell 29% from a year earlier to $787 million as the company spent more on artificial intelligence projects, including its Optimus robot. Capital spending more than doubled from a year earlier to $3.73 billion.
Automotive revenue fell 3% to $20.56 billion, which Tesla blamed on lower average selling prices and trouble securing enough batteries to fill orders. Services revenue rose 33% to $4.61 billion, while energy revenue fell 16% to $2.88 billion. The company also cut its 2026 capital-spending forecast to about $20 billion from more than $25 billion.
Tesla shares fell about 5% in premarket trading Thursday. The results came a day after CEO Elon Musk said special committees at Tesla and SpaceX are studying a merger of the two companies; on Tesla's call he said he had "said everything that should be said" about the idea. See our First Light report on SpaceX's results.
