Tesla Q3 Operating Profit Falls 56% to $718 Million, Missing Estimates; Shares Drop 4.5% Pre-market

Tesla (TSLA) reported third-quarter operating profit of $718 million, down 56% year-over-year and well below Wall Street's $1.4 billion estimate, sending shares down 4.5% in pre-market trading on October 22. Revenue was roughly flat year-over-year despite the profit miss. Automotive gross margin excluding regulatory credits came in at about 18%, beating expectations. CEO Elon Musk reiterated his long-term bet on the Robotaxi business, but the service has yet to contribute meaningful revenue since launching in Austin, Texas in June 2025. Tesla's core auto sales remain its primary revenue source as investments in AI, autonomy and humanoid robots have yet to generate returns. Musk said Tesla could capture most global passenger miles absent government restrictions, targeting expansion through low-cost Cybercab vehicles and autonomy software. ARK Invest projects a $4,400 share price by 2031, with roughly 80% of that valuation tied to Robotaxi. Canaccord's George Gianarikas maintains a Buy rating with a $442 target; the Wall Street average sits near $395.