Tesla Releases Third Quarter 2026 Financial Results

Cash and investments increased despite lower operating earnings, while battery availability constrained vehicle volume growth.

Rhea-AI Summary

Tesla (NASDAQ: TSLA) reported third-quarter 2026 revenue of $28.046 billion, roughly flat year over year, as operating income declined. Operating income fell 56% to $718 million, with a 2.6% operating margin. GAAP diluted earnings per share fell to $0.22 from $0.39 a year earlier. Operating cash flow was $6.3 billion and free cash flow was $1.5 billion; cash and investments increased $1.9 billion sequentially to $45.4 billion.

Vehicle deliveries declined 2% year over year to 486,532, while energy storage deployments rose 10% to 13.7 GWh. Active FSD subscriptions, including upfront purchases, increased 67% to 1.74 million. Cybercab began providing Robotaxi rides in Austin on September 3. Megafactory Texas began production with planned capacity of 50 GWh. Tesla ended the quarter with its largest passenger-vehicle backlog in four years, but said battery availability limited vehicle volume growth.

16 points · 0 major

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0 major · 12 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointGross profit increased to $5.494 billion from $5.054 billion in Q3 2025.
• Moderate pointOperating cash flow of $6.3 billion supported $1.5 billion in free cash flow.
• Moderate pointServices and other revenue increased to $4.605 billion from $3.475 billion in Q3 2025.
• Moderate pointActive FSD subscriptions reached 1.74 million, up 67% year over year, including upfront purchases.
• Moderate pointVehicle production rose 4% year over year to 464,391.
• Moderate pointPassenger-vehicle backlog ended the quarter at its highest level in four years.
• Moderate pointEnergy storage deployments increased 10% year over year to 13.7 GWh.

9 minor points

• Minor pointCash and investments reached $45.4 billion, increasing $1.9 billion sequentially.
• Minor pointFSD adoption exceeded 75% of new North American vehicle deliveries, nearly twenty percentage points higher sequentially.
• Minor pointEnergy storage orders and backlog reached their highest levels.
• Minor point. Forward-looking: it has not happened yet and may not happen.Megafactory Texas began production, with planned capacity of 50 GWh.
• Minor pointMegapacks using Nevada-produced LFP battery cells began shipping.
• Minor pointCybercab Robotaxi rides began September 3 in Austin; cumulative unsupervised Robotaxi miles grew eightfold sequentially.
• Minor pointTesla Semi production in Nevada and Optimus production in Fremont have begun.
• Minor pointInfrastructure capacity expansion is underway across computing, solar, battery materials and semiconductor manufacturing.
• Minor pointRestructuring and other expenses were zero, compared with $238 million in Q3 2025.

Negative

• Moderate pointOperating income fell 56% year over year to $718 million, with a 2.6% operating margin.
• Moderate pointRevenue was roughly flat year over year at $28.046 billion, versus $28.095 billion.
• Moderate pointVehicle deliveries fell 2% year over year to 486,532.
• Moderate pointBattery availability limited vehicle volume growth during the quarter.
• Minor pointGAAP net income used to calculate EPS fell to $787 million from $1.373 billion in Q3 2025.

7 minor points

• Minor pointGAAP diluted EPS declined to $0.22 from $0.39 in Q3 2025.
• Minor pointAutomotive revenue declined to $20.560 billion from $21.205 billion in Q3 2025.
• Minor pointEnergy generation and storage revenue declined to $2.881 billion from $3.415 billion in Q3 2025.
• Minor pointResearch and development expenses increased to $2.761 billion from $1.630 billion in Q3 2025.
• Minor pointSelling, general and administrative expenses increased to $2.015 billion from $1.562 billion in Q3 2025.
• Minor pointFSD approval in additional markets remains dependent on regulatory work.
• Minor pointGlobal vehicle inventory reached 11 days of supply, up 10% year over year.

News Explained

The quarter-end cash and investment balance rose 1.9 billion dollars sequentially, while operating income fell 56 percent year over year.

The published third-quarter results show Tesla generated $1.5 billion in free cash flow and ended the quarter with $45.4 billion in cash, cash equivalents and short-term investments, up $1.9 billion sequentially.

Revenue was roughly flat year over year at $28.0 billion, while operating income fell 56% year over year to $0.7 billion, with a 2.6% operating margin.

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Market Reaction – TSLA

$377.84 – $394.98 Day Range

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On Oct 21, the day this news came out, the latest delayed price for TSLA is 1.67% above the previous close. Our momentum scanner has recorded 5 alerts for this stock so far that day. The latest delayed price is $392.93.

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Key Figures

Revenue: $28.0B GAAP operating income: $0.7B Operating margin: 2.6% +5 more

Revenue

$28.0B

Q3 2026; roughly flat YoY

GAAP operating income

$0.7B

Q3 2026; down 56% YoY

Operating margin

2.6%

Q3 2026

GAAP net income

$0.8B

Q3 2026

Non-GAAP net income

$1.7B

Q3 2026

Operating cash flow

$6.3B

Q3 2026

Free cash flow

$1.5B

Q3 2026

Cash, cash equivalents and short-term investments

$45.4B

Quarter-end Q3 2026

Previous Earnings Reports

2 past events · Latest: Jul 22

Same Type 2 events

1. Jul 22

   Q2 earnings results

   24h Move

   -14.5%

   Operating income fell 57% and free cash flow was negative despite 26% revenue growth.

2. Oct 22

   Q3 earnings results

   24h Move

   +2.3%

   Revenue rose 12% and free cash flow reached a record $3.990B alongside record deliveries.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, free cash flow, lfp

4 terms

gaap financial

"$0.7B GAAP operating income"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"$1.7B non-GAAP net income"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

free cash flow financial

"Free cash flow of $1.5B"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

lfp technical

"Megapacks built with LFP cells from our factory in Nevada"

LFP stands for lithium iron phosphate, a type of rechargeable battery chemistry used in electric vehicles and energy storage systems. It trades slightly less energy density for greater safety, longer cycle life and lower cost, so investors watch LFP adoption like choosing a durable, affordable tool instead of a high-performance but fragile one; changes in its use can affect battery makers, automakers and energy-storage economics.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Tesla, Inc. (NASDAQ: TSLA) Q3 2026 Update

Highlights

• Profitability
  • $0.7B GAAP operating income
• Cash
  • Operations $0.8B GAAP net income
  • $1.7B non-GAAP net income¹
  • Operating cash flow of $6.3B
  • Free cash flow² of $1.5B
  • $1.9B increase in our cash and investments³
  • Produced and delivered our 10 millionth vehicle
  • Launched Cybercab into the Robotaxi fleet in Austin
  • Record production at Gigafactory Berlin

Summary

In Q3, 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. Strength in our core business also continued, and we achieved our second consecutive quarter of TTM revenue in excess of $100B.

FSD (Supervised)⁴ attach rate continued to grow, reaching over 75% of new vehicle deliveries in North America – our most mature market – a nearly twenty percentage point sequential increase. We believe that FSD is driving demand in markets where it is available, and we continue to work with regulators to get it approved in other markets.

We started providing Robotaxi rides using Cybercabs on September 3 in Austin. Cumulative unsupervised Robotaxi miles grew eightfold quarter over quarter, driven by sustained double-digit weekly growth.

We ended the quarter with the largest backlog for our passenger vehicles in four years. We rolled out the updated Tesla Semi that is produced on our high-volume manufacturing line in Nevada and unveiled the Next Gen Roadster on October 15. While battery availability continued to be the limiting factor in increasing auto volumes in the quarter, we have made additional progress in securing future supply, as we work toward our goal of maximum utilization of our factories.

Demand for our Energy Storage business remained strong in the quarter, with our highest-ever order rate and backlog. Energy storage is the fastest way to add power to the existing grid and is critical to data center uptime. We expect rising data center demand to continue driving demand for our products. Megafactory Texas began production, with planned capacity of 50 GWh. We also advanced LFP supply domestication in the U.S., shipping the first Megapacks built with LFP cells from our factory in Nevada.

We continue to invest in the future through R&D and Capex spend across our businesses, including SI, robotics and energy. Much hard work lies ahead, but we are as optimistic as ever. Thank you to our supporters as we continue to execute on many challenging and important projects.

¹ Refer to the Reconciliation of GAAP to Non–GAAP Financial Information slide

² Free cash flow = operating cash flow less capex

³ Includes cash, cash equivalents and short-term investments

⁴ Active driver supervision required; does not make the vehicle autonomous

Note: all information herein refers to the current quarter unless otherwise noted.

Year-over-Year Financial Summary

Revenue. Total quarterly revenue was roughly flat YoY at $28.0B. YoY, revenue was impacted by the following items¹:

Profitability. - decrease in Energy Generation and Storage, partially due to tariff-related customer refunds

• - lower vehicle average selling price (ASP) (excl. FX impact¹), inclusive of mix impact
• - lower regulatory credit revenue
• - decrease in vehicle deliveries
• + growth in Services and Other
• + positive FX impact of $0.3B¹
• + higher automotive ancillary sales, primarily driven by an increase in FSD subscriptions Our quarterly operating income decreased 56% YoY to $0.7B, resulting in a 2.6% operating margin. YoY, operating income was primarily impacted by the following items¹:
• - increase in operating expenses driven by SI and other R&D projects, SBC (including 2025 CEO Performance Award) and SG&A
• - lower regulatory credit revenue
• - lower Energy Generation and Storage gross profit
• + growth in Services and Other gross profit
• + improved vehicle region and product mix, partially offset by lower vehicle average selling price (ASP) (excl. FX impact¹)
• + lower restructuring and other expenses
• + higher automotive ancillary sales, primarily driven by an increase in FSD subscriptions
• + positive FX impact of $0.1B¹

Cash. Quarter-end cash, cash equivalents and short-term investments was $45.4B. The sequential increase of $1.9B was primarily a result of positive free cash flow of $1.5B.

¹ Impact is calculated on a constant currency basis. Actuals are compared against current results converted into USD using average exchange rates from Q3’25.

Operational Summary (Unaudited)

	Q3-2025	Q4-2025	Q1-2026	Q2-2026	Q3-2026	YoY
Model 3/Y production	435,826	422,652	394,611	442,936	457,387	5%
Other models production	11,624	11,706	13,775	8,822	7,004	-40%
Total production1	447,450	434,358	408,386	451,758	464,391	4%
Model 3/Y deliveries	481,166	406,585	341,893	467,762	478,237	-1%
Other models deliveries	15,933	11,642	16,130	12,364	8,295	-48%
Total deliveries1	497,099	418,227	358,023	480,126	486,532	-2%
of which subject to operating lease accounting	10,230	10,996	3,430	7,580	6,911	-32%
Cumulative deliveries2 (all-time; mil)	8.5	8.9	9.2	9.7	10.2	20%
Active FSD Subscriptions3 (mil)	1.04	1.10	1.28	1.48	1.74	67%
Total end of quarter operating lease (new vehicle) count4	167,163	163,075	151,991	141,876	133,720	-20%
Global vehicle inventory (days of supply)5	10	15	27	15	11	10%
Storage deployed (GWh)	12.5	14.2	8.8	13.5	13.7	10%
Supercharger stations	7,753	8,182	8,463	8,704	8,904	15%
Supercharger connectors	73,817	77,682	79,918	82,357	84,465	14%

¹ Vehicle production and delivery numbers represent passenger vehicles sold to customers.

² In accordance with our 2025 CEO Performance Award, metric includes all new Tesla vehicles delivered to customers plus any unsupervised Robotaxis placed into commercial operation. For further detail see our 2025 Proxy Statement.

³ In accordance with our 2025 CEO Performance Award, metric includes both upfront payment and monthly subscriptions and excludes free trials. For further detail see our 2025 Proxy Statement.

⁴ Beginning in Q4’25, end of quarter operating lease count pertains only to new vehicles. Q3’25 has been adjusted to exclude used vehicles.

⁵ Days of supply is calculated by dividing new vehicle ending inventory by the relevant quarter’s deliveries and using 75 trading days (aligned with Automotive News definition).

Outlook

Volume. We are focused on maximum capacity utilization at our factories. Deliveries and deployments will be impacted by aggregate demand for our products, supply chain readiness and allocation decisions between sale to customers and use for our owned and operated fleet.

Cash. We will manage the business such that we ensure a strong balance sheet, maintaining sufficient liquidity to fund our product roadmap, long-term capacity expansion plans – including further vertical integration – and other expenses.

Profit. While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of SI, software and fleet-based profits.

Product. We continue to evolve and augment our product lineup with a focus on cost, scale and future monetization opportunities via services powered by our SI software. We remain focused on growing our sales volumes through a differentiated and efficiently managed product portfolio, which includes leveraging and optimizing our existing production capacity before building new factories and production lines. Production has begun for Tesla Semi in Nevada and Optimus in Fremont. Capacity build-out and ramp related to our multi-year infrastructure initiatives, including SI compute, solar, battery material and semiconductor manufacturing are underway.

Statement of Operations (Unaudited)

In millions of USD or shares as applicable, except per share data	Q3-2025	Q4-2025	Q1-2026	Q2-2026	Q3-2026
REVENUES
Automotive sales	20,359	16,750	15,473	20,006	20,094
Automotive regulatory credits	417	542	380	146	113
Automotive leasing	429	401	381	364	353
Total automotive revenues	21,205	17,693	16,234	20,516	20,560
Energy generation and storage	3,415	3,837	2,408	3,139	2,881
Services and other	3,475	3,371	3,745	4,581	4,605
Total revenues	28,095	24,901	22,387	28,236	28,046
COST OF REVENUES
Automotive sales	17,365	13,874	12,616	16,866	16,570
Automotive leasing	225	206	196	187	184
Total automotive cost of revenues	17,590	14,080	12,812	17,053	16,754
Energy generation and storage	2,342	2,739	1,456	2,499	1,927
Services and other	3,109	3,073	3,399	3,933	3,871
Total cost of revenues	23,041	19,892	17,667	23,485	22,552
Gross profit	5,054	5,009	4,720	4,751	5,494
OPERATING EXPENSES
Research and development	1,630	1,783	1,946	2,371	2,761
Selling, general and administrative	1,562	1,655	1,833	1,982	2,015
Restructuring and other	238	162	—	—	—
Total operating expenses	3,430	3,600	3,779	4,353	4,776
INCOME FROM OPERATIONS	1,624	1,409	941	398	718
Interest income	439	449	434	422	445
Interest expense	(76)	(85)	(92)	(81)	(90)
Other (expense) income, net	(28)	(592)	(535)	590	(117)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries	16	16	14	14	17
Less: Buy-out of noncontrolling interest	-	-	-	(2)	—
NET INCOME USED IN COMPUTING NET INCOME PER SHARE OF COMMON STOCK	1,373	840	477	1,116	787
Net income per share of common stock attributable to common stockholders
Basic	$0.43	$0.26	$0.15	$0.34	$0.24
Diluted	$0.39	$0.24	$0.13	$0.32	$0.22
Weighted average shares used in computing net income per share of common stock
Basic	3,227	3,231	3,234	3,237	3,240
Diluted	3,526	3,539	3,538	3,540	3,541

Webcast Information

Tesla will provide a live webcast of its third quarter 2026 financial results conference call beginning at 4:30 p.m. CT on October 21, 2026 at ir.tesla.com. This webcast will also be available for replay for approximately one year thereafter.

Source: Tesla Q3 2026 Update (PDF), ir.tesla.com.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Tesla's Q3 2026 revenue and earnings?

Tesla reported $28.046 billion in revenue and GAAP diluted earnings per share of $0.22. Revenue was roughly flat against $28.095 billion in Q3 2025, while diluted earnings per share declined from $0.39. Operating income fell 56% year over year to $718 million.

How many vehicles did Tesla deliver in Q3 2026?

Tesla delivered 486,532 vehicles in Q3 2026, down 2% year over year. Model 3/Y deliveries totaled 478,237, down 1%, while other-model deliveries totaled 8,295, down 48%.

What does Tesla's Q3 2026 outlook say about future deliveries and profits?

Tesla says future deliveries and deployments will depend on demand, supply-chain readiness and allocation between customer sales and its own fleet. The company expects hardware-related profits to be accompanied over time by accelerating profits from super intelligence, software and fleet operations.

Does Tesla's FSD subscription growth mean its vehicles are autonomous?

FSD (Supervised) requires active driver supervision and does not make the vehicle autonomous. The active-subscription metric includes both upfront payments and monthly subscriptions, but excludes free trials.