TESLA Q3 Earnings Report Analysis
Revenue beat with EPS miss reveals operating cost challenges
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Equity Research Report: TSLA (Tesla Inc.)
Date: October 23, 2025
Analysis: Q3 2025 Earnings Report vs. Q2 2025 & Consensus
Step 1. Performance Highlights and Quantitative Comparison
Performance Summary Table
Key Business Drivers & Performance Indicators
· Record Deliveries & Revenue: The quarter was defined by record vehicle deliveries of 497,099 19and record revenue of $28.1B 20, driven by strength across all regions21.
· Energy Segment Surge: The Energy Generation and Storage segment was a standout, with revenue growing 44% YoY to $3.4B22. This was underpinned by record energy storage deployments of 12.5 GWh 23, fueled by the Megafactory Shanghai ramp and record Powerwall deployments24.
· Profitability Pressure: Despite the revenue beat, profitability contracted significantly year-over-year. Operating income fell 40% YoY 25 due to a combination of factors:
o Increased operating expenses, driven by AI, R&D, and SG&A26.
o Lower regulatory credit revenue ($417M vs. $739M in Q3 2024)272727.
o Higher average cost per vehicle28.
· Strong Cash Flow: The company generated record free cash flow of nearly $4.0B 2929, a significant sequential recovery from $0.1B in Q230. Quarter-end cash increased by $4.9B to $41.6B3131.
· Product Expansion: Management highlighted the launch of more affordable Model 3 and Model Y “Standard” options 323232and the new Model YL (longer wheelbase) in China33. They also unveiled the next-generation Megapack 3 and Megablock industrial storage products3434.