Tesla's profit falls 43% as deliveries slip, but free cash flow returns to $1.5 billion

Tesla's third-quarter profit fell sharply as operating costs climbed and vehicle deliveries edged lower, though the electric-vehicle maker swung back to positive free cash flow and said battery supply, not demand, was holding back car volumes.

GAAP net income attributable to shareholders dropped to $787 million, or 22 cents a share, from $1.37 billion, or 39 cents, a year earlier, according to the quarterly update Tesla filed with an 8-K on Wednesday. Non-GAAP EPS was 48 cents, compared with 50 cents.

Total revenue was essentially flat at $28.05 billion. Automotive revenue slipped 3% to $20.56 billion and energy generation and storage revenue fell to $2.88 billion from $3.42 billion, while services and other revenue jumped to $4.61 billion from $3.48 billion.

Margins and cash

Gross profit rose to $5.49 billion from $5.05 billion, but operating expenses climbed to $4.78 billion from $3.43 billion, cutting operating income to $718 million from $1.62 billion.

Operating cash flow was $6.26 billion. After $4.73 billion in capital expenditures, free cash flow came to $1.53 billion, a turnaround from negative $1.09 billion in the second quarter. Cash and investments ended at $45.45 billion.

Cars, robotaxis and batteries

Deliveries fell 2% to 486,532 vehicles while production rose 4% to 464,391. Active Full Self-Driving subscriptions reached 1.74 million, up from 1.04 million a year earlier.

Tesla said it started providing Robotaxi rides using Cybercabs in Austin on Sept. 3 and ended the quarter with the largest passenger-vehicle backlog in four years. "Battery availability continued to be the limiting factor in increasing auto volumes in the quarter," the company said.

Energy storage deployments were 13.7 gigawatt-hours, and Tesla said demand remained strong, with its highest-ever order rate and backlog. Its Megafactory in Texas began production, with planned capacity of 50 GWh.

Tesla did not give a numeric delivery forecast, saying it is focused on maximum capacity utilization at its factories.

By the numbers

• Revenue: $28.05 billion, vs. $28.10 billion
• GAAP EPS: $0.22, vs. $0.39
• Non-GAAP EPS: $0.48, vs. $0.50
• Deliveries: 486,532, down 2%
• Free cash flow: $1.53 billion
• Energy storage deployed: 13.7 GWh

Sources

1. Tesla, Inc., Form 8-K (Item 2.02) with Exhibit 99.1 Q3 2026 Update, filed Oct. 21, 2026, accession 0001628280-26-066738

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.