Tesla Q3 Tops Estimates but EV Revenue Falls 3%, Shares Slip After Hours

Tesla (TSLA) reported third-quarter results Wednesday that beat analyst expectations, but shares fell more than 2% after hours as core automotive revenue declined and profitability weakened. Revenue came in at $28.05 billion versus the $27.9 billion LSEG estimate, down slightly from $28.24 billion a year earlier. Adjusted EPS was 48 cents, topping the 43-cent consensus. Automotive revenue fell 3% year over year to $20.56 billion and energy revenue dropped 16% to $2.88 billion, partly offset by a 33% jump in services and other revenue to $4.61 billion. Net income attributable to common stockholders fell 29% to $787 million, or 22 cents per share. Tesla attributed the EV weakness to lower average selling prices and battery supply constraints. Capital expenditures more than doubled to $3.73 billion on robot and AI spending, while free cash flow fell 62% to $1.53 billion. FSD active subscriptions rose 67% year over year to 1.74 million. Third-quarter deliveries totaled 486,532, down about 2%. The results follow CEO Elon Musk's comments that a merger between Tesla and SpaceX would be a "good idea," with both boards forming special committees to evaluate a deal.