Tesla said Wednesday that its profit sank in the third quarter after it cut car prices to lift sales and earned less money from selling clean-air credits.
Profit fell 37 percent, to $1.4 billion from a year earlier, the company said. Revenue rose 12 percent, to $28.1 billion.
Tesla sold more cars from July through September than it did in the third quarter of 2024, but earned less money per car because it cut prices and offered low-interest loans for its most popular models.
The company reduced prices further this month, offering stripped-down versions of its Model 3 sedan and Model Y sport utility vehicle for around $5,000 less than the previous lowest-cost versions of those cars.
Tariffs also cut into profit, Tesla said. The company makes all the cars it sells in the United States in California and Texas, but must pay tariffs on imported raw materials and components.
The company declined to issue a forecast for sales and profit, saying, “It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure, and demand for durable goods and related services.”
Elon Musk, Tesla’s chief executive, sounded a much more optimistic note, saying the company was on the cusp of perfecting cars that will be able to drive themselves without human supervision. When that happens, demand for the company’s cars will soar, he added.
“I feel like we’ve got clarity, and it makes sense to expand production as fast as we can,” Mr. Musk said during a conference call to discuss the company’s earnings.
By the end of the year, the self-driving Robotaxis the company operates in Austin, Texas, will operate without company drivers who oversee rides offered to paying customers, he said. Tesla will begin producing a fully autonomous vehicle it calls the Cybercab, which will not have a steering wheel or pedals, by the middle of next year, he said.
Mr. Musk has been predicting for years that fully autonomous vehicles are just around the corner, but has yet to deliver on that promise. Tesla factories are making fewer vehicles than they are capable of, making it risky to expand production.
The earnings report was the last before Tesla shareholders vote on whether to approve a proposed pay package for Mr. Musk. The plan would grant him shares that would be worth $1 trillion if he met a series of profit, sales and stock valuation targets.
Analysts had expected Tesla to present the most positive quarterly report possible in view of the upcoming vote. Tesla will hold its annual meeting on Nov. 6.
For Mr. Musk’s admirers, sales and profit are no longer the most important measures of Tesla’s success. They value the company based on expectations for future businesses, primarily self-driving taxis and humanoid robots.
Tesla car sales are important, some analysts say, primarily because the vehicles can be equipped with self-driving software for which owners will pay extra. Data collected by the cameras installed in the vehicles will be used to train artificial intelligence and eventually allow cars to drive without human intervention. Currently Tesla drivers are supposed to intervene if the software makes a mistake.
“Every new car sold feeds that machine,” Shay Boloor, chief market strategist at Futurum Equities, said in a note ahead of the earnings release.
Skeptics say Tesla’s share price is way too high when measured against its earnings. The company’s quarterly profit was slightly larger than General Motors’ earnings of $1.3 billion for the same quarter. Yet Wall Street values Tesla at more than $1.4 trillion and G.M. at $64 billion. The share price closed about 1 percent down on Wednesday.
“Our primary concern remains the disconnect between this earnings decline and the stock’s meteoric run-up since April,” Garrett Nelson, an analyst at CFRA Research, said in a note.
Tesla sales in the third quarter were bolstered by Americans’ taking advantage of a federal tax credit on electric vehicles that expired at the end of September. Most analysts expect sales to slump in coming months.
The company also earned less money from clean-air credits that other carmakers had to buy to comply with environmental rules. Revenue from that source fell 44 percent, to $417 million during the quarter, Tesla said.
President Trump and Republicans in Congress gutted clean-air rules, freeing established carmakers from paying Tesla for credits, which had often accounted for a large share of the company’s profit.
Tesla’s share of the market for electric vehicles has continued to decline as Chinese, American and European carmakers offer more models that have comparable technology and often sell for less. Tesla’s share in the United States was 41 percent in the third quarter, down from 48 percent a year earlier, according to Cox Automotive.
One bright spot for Tesla was the market for large batteries used to store renewable energy. Sales of those products rose 44 percent, to $3.4 billion.
Mr. Musk repeated his belief that the company’s Optimus humanoid robots, which have not yet gone on sale, will transform humanity and end poverty. He suggested that they will even be able to perform surgery.
“Imagine if everyone had access to an incredible surgeon,” he said.
Referring to his proposed $1 trillion pay package, Mr. Musk said he was not interested in the monetary value of the compensation. Rather, he said, he is interested in gaining more control over Tesla. The plan would give him voting control of almost 29 percent of the company’s shares if he met all the targets.
“If we build this robot army,” he said, “do I have at least a strong influence over that robot army?”
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
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