Tesla Q3 Results: Full order books, but declining figures
Tesla’s sales have stagnated, and the third quarter saw a significant drop in profits for the U.S. electric vehicle manufacturer. Yet things aren’t that bad in Tesla’s automotive business—order books are full. The reasons lie elsewhere.
Image: Tesla
Tesla currently cannot generate growth in its automotive business as reflected in its financial statements. Sales from the auto division dropped by 3% between July and September compared to the previous year’s quarter, to $20.56 billion. It was only through its other business segments that Tesla managed to match last year’s total sales of $28 billion. The result: zero percent growth, but also no decline.
Tesla roughly reached a $28 billion in sales volume already in the second quarter of this year. Notably, Tesla reported a one-billion-dollar profit in both Q3/2025 and Q2/2026 despite similar sales figures. This is no longer the case: GAAP profit dropped to $787 million in the most recent quarter, a significant 43 percent decline from the previous year’s quarter.
The comparison quarter was characterized by ahead-of-schedule purchases
It’s important to note that Q3/2025 should be viewed with caution as a comparison basis, as there were many advance purchases at that time due to the expiration of U.S. subsidies, resulting in artificially high vehicle sales figures. Additionally, revenue from CO2 certificates (“regulatory credits”) — which have long been a lucrative source of income for Tesla at the expense of other automakers — is also declining. It drops from $417 million in Q3/2025 to just $113 million now. This explains a significant portion of the drop in profits.
An indication of where things are going wrong can be seen in the margin: With an operating margin of 2.6%, Tesla has declined significantly. It had dropped even lower to 1.4% in Q2/2026. This means the entire company is operating less efficiently. Tesla itself cites the declining average selling price of its vehicles as one of many factors contributing to this issue. It is clear that the U.S. electric vehicle manufacturer is currently far from achieving quarterly profits of over 2 or 3 billion dollars—like in the successful quarters of 2021 and 2022—or double-digit margins.
Gigafactory Berlin has reached record production levels
Tesla itself hardly addresses this in its explanations, focusing instead on what is going well: “We have seen success in several markets—including Canada, Australia,”
Japan and Taiwan – record deliveries compared to the previous quarter. Given the strong demand we’re seeing in various markets, we’re focusing on increasing production at our facilities, and we’ve achieved record output at the Gigafactory Berlin.” And: “We have begun mass production of the Tesla Semi, our Class 8 heavy-duty truck.”
When it comes to production and deliveries, Tesla has also returned to stable performance: After a mixed 2025, the first three quarters of 2026 have seen renewed consistency, as evidenced by 464,000 vehicles produced and over 486,000 delivered in the third quarter. The fact that deliveries exceeded production by more than 22,000 vehicles indicates that inventory levels were successfully reduced.
High Activity on the Production Lines
Tesla also produced as many electric vehicles between early July and late September as it had not in two years: the 464,000 vehicles manufactured this time were last surpassed by approximately 470,000 units in Q3/2024. Compared to the same quarter last year, the 464,000 cars produced represent a 3.7 percent increase, while compared to the second quarter of 2026 it is a +2.7 percent increase.
Upon closer inspection of the vehicles delivered over the year, an upward trend is also evident: 486,000 vehicles represent only a 1.2 percent increase compared to the second quarter of 2026, but that figure was still about 25 percent higher than the first quarter, which is often weaker due to seasonal factors. Last year, however, Tesla came close to hitting the 500,000 mark in Q3 thanks to the aforementioned advance purchases. The U.S. electric vehicle manufacturer, of course, has not yet reached that figure.
Tesla deals with its core business in the current quarterly report in a very brief and concise manner. Only in a parenthetical sentence does it mention that the quarter “ended with the highest backlog of car orders in four years,” without going into further detail. Tesla also no longer provides targets for production or sales volume.
Anyway, the investment-intensive future business areas are taking up more and more space in the report. The company emphasizes that it has “been able to maintain its strong momentum with many projects in the areas of Super Intelligence (SI), robotics, and renewable energy, which will be crucial for building a future filled with ‘Amazing Abundance’.” It is new that Tesla now refers to Super Intelligence (SI) rather than AI (“Artificial Intelligence”) in this context.
Lower investment expenses for the current year
In other sections of the report, Tesla reports progress on its FSD (Supervised) driver assistance system and the expansion of its robotaxi fleet in the U.S. The recent demonstration of the flying Roadster prototype is also briefly mentioned. Tesla CEO Elon Musk further stated during the earnings call that Tesla could begin delivering its humanoid “Optimus” robot to external companies by the end of 2027.
An important point is Tesla’s investment plans. Here, Tesla is slowing down: Investment expenditures (referred to as Capex in accounting terms) are expected to amount to around $20 billion this year.