Tesla’s profits fell 37% despite record quarterly revenue of $28bn (£21bn), driven by US buyers rushing to claim EV tax credits. Rising costs and competition from rivals like BYD impacted earnings, while vehicle sales remain Tesla’s main revenue source.
Tesla Profits Dip Despite Record Revenue Surge
Tesla’s profits have fallen even as the company reported record quarterly revenue, driven by a surge in US buyers rushing to claim a key electric vehicle tax credit before it expired last month.
For the three months ending in September, Tesla’s revenue hit a record $28 billion (£21 billion) — a 12% increase compared to the same period last year. However, profits dropped 37%, partly due to higher costs associated with tariffs and research spending.
The results come just weeks before shareholders are set to vote in November on a proposed $1 trillion pay package for CEO Elon Musk. Following the announcement, Tesla shares fell about 3.8% in extended trading.
Tesla’s $1.4 trillion market valuation has been buoyed in recent months by investor optimism that Musk can steer the company toward leadership in artificial intelligence (AI) and robotics. Nevertheless, vehicle sales remain the company’s primary revenue source as those new ventures continue in development.
Like other global automakers, Tesla faces mounting competition — particularly from Chinese manufacturers such as BYD.
The firm managed to reverse its streak of declining quarterly sales as American customers rushed to secure federal tax credits of up to $7,500 before they expired at the end of September. Yet, during the same period, competitors like Ford and Hyundai recorded even stronger growth in US sales.