Tesla automotive revenue drops 3% year-over-year
Tesla on Wednesday reported third-quarter revenue and earnings that beat Wall Street projections, following Chief Executive Elon Musk’s Tuesday statement to SpaceX investors that there is “a lot of merit” to merging Tesla with his rocket and AI company SpaceX. Tesla posted revenue of $28.05 billion and earnings per share of $0.48, above analyst projections of $27.9 billion and $0.43. Tesla’s automotive revenue, however, fell 3% from the year-ago quarter.
The Guardian said investors would pay close attention to Tesla’s Wednesday-afternoon third-quarter earnings call, after Musk floated the idea of merging the car company with SpaceX. Musk’s merger comment came on a Tuesday call with SpaceX investors. “There’s a lot of merit to combining the companies,” Musk said on the call. The boards of both businesses have established special committees to explore the potential combination, though the companies have not yet reached agreement on the transaction’s terms. Any merger would require the approval of 50% of all Tesla shareholders.
A Tesla dealership in Santa Clarita, California. Photograph: Justin Sullivan/Getty Images.
The earnings landed against a year of declining share price and stepped-up competition from lower-priced Chinese automakers. Tesla’s stock has fallen by more than 11% this year, although it appears to have rebounded some since last week with the news of the possible SpaceX merger.
For the three months, Tesla reported revenue of $28.05 billion — beating the $27.9 billion analysts had forecast but falling short of the $28.23 billion Tesla posted in the second quarter. Earnings per share of $0.48 topped the $0.43 analyst projection. Automotive revenue dropped 3% from the year-earlier period.
“We maintained strong momentum on many projects spanning Super Intelligence (SI), robotics and renewable energy that will be critical to building a future of Amazing Abundance,” Tesla wrote in its quarterly report.
Last week, Musk unveiled Tesla’s electric sports car, the Roadster 2, which he said uses technology from SpaceX to “basically fly like a rocket”. At a demonstration at a SpaceX facility in Texas, a remote-controlled version of the vehicle drove up a steeply curved ramp and used jet-like thrusters to flip over, hover and land. The car is priced at upwards of $200,000.
“Flying cars are real … it can basically fly like a rocket, it can do rolls, crazy gymnastics,” Musk said at the event. He added: “I’m not sure it’s necessarily legal in all jurisdictions.”
Tesla’s vehicle sales are not as crucial to its market performance as they once were, as the company has pivoted toward robotics, autonomous driving and AI. The Optimus robot has faced production difficulties, and the Robotaxi driverless service has hit roadblocks in scaling its fleet and expanding to new cities.
Musk has previously projected that the Robotaxi service would see near-infinite demand, with “probably half the population of the US” using the autonomous ride-hailing service by the end of 2025. He has also forecast manufacturing as many as one million Optimus robots each year. Neither target has been reached, and rollout has been slow.
“Tesla’s leaders continue to make big claims about autonomous mobility and physical AI,” said Paul Miller, a principal analyst at the market research firm Forrester. “The company has achieved remarkable things but continues to miss some of its leaders’ bolder bets.”
“Tesla robotaxis are undeniably carrying passengers, but not yet at anywhere near the levels the company promised,” Miller added.