In its latest annual report, Tesla presents itself as stronger than ever: revenue grew to $28.1 billion in the third quarter of 2025 – a new quarterly record and 12 per cent above the previous year. Notably, it is no longer just cars that contribute to this total, but increasingly Tesla’s energy business, charging business and other services. Looking at the automotive sector in isolation, Tesla generated revenue of $21.2 billion (+6% YoY). This is not a record: in Q2/2023, it was slightly higher.
A look at profits and margins shows that Tesla’s growth is fragile and has not yet reached the previous acceleration: with a bottom line of $1.37 million GAAP surplus and 5.8 per cent operating margin, Tesla continues to stabilise over the course of the year. The US electric car manufacturer is currently a long way from quarterly surpluses in excess of $2 or $3 billion – as seen in the successful quarters of 2021 and 2022 – or double-digit margins.
High operating expenses reduce profits
Tesla cites rising operating expenses, tariffs, higher average costs per vehicle (“due to lower fixed cost coverage for certain models”) and relatively low revenues from the sale of CO2 credits as some of the reasons for this. The latter amounted to ‘only’ $417 million between July and September, whereas in some previous quarters this reliable item was sometimes twice as high.
What Tesla undoubtedly achieved in the third quarter was high delivery figures: Tesla surprised positively at the beginning of the month with a record 497,099 electric cars sold in Q3. The company built 447,450 electric cars for this purpose. This means that Tesla is back above last year’s figures. The same applies to the energy business with 12.5 GWh installed (+81% YoY) and the charging business with 3,500 new Supercharger charging stations (+18% YoY).
Volume models single-handedly drive revenue
Meanwhile, it is striking that the importance of large models remains virtually unchanged. With 435,826 Model 3/Y vehicles built and 481,166 delivered, the vast majority (as before) in Q3 accounted for the two mid-range models. The ‘other’ series, i.e. the Model S, Model X and, above all, the Cybertruck, accounted for 11,624 units produced and 15,933 units delivered. Their financial significance remains marginal.
It remains a question whether the improved sales figures were based on the model updates or the wider range of variants offered in China, but it remains to be seen how sales of the slimmed-down Model 3 and Model Y take effect when they launch in the fourth quarter. Or simply the expiring subsidy in the US, which led to premature purchases, which is likely to be followed by a sales slump in the fourth quarter? Tesla itself has not commented on this.
Strong US business – thanks to a one-off effect?
However, the fact that the cancelled tax credit in the US explains at least part of the sales volume is supported by a statistic that otherwise receives little attention in Tesla’s annual report: Tesla publishes the market share of its vehicles by world region on a quarterly basis. While this has fallen from roughly 2.5 to 2 per cent in Europe and China within a year, and the trend is downward, market share in the US rose noticeably against the general trend in the last quarter to 3.5 per cent. Even though these are relative values, the curves suggest that Tesla has done good business in the past three months, especially in the US, probably thanks to a one-off effect. Ultimately, however, sales momentum can only be assessed with the upcoming sales statistics.
As for the coming months, no major innovations are expected in Tesla’s model range. The company says it is focusing on the sale of a differentiated and efficiently managed product portfolio as well as on costs, scaling and future monetisation opportunities through services based on our AI software. Instead of new plants, existing facilities are to be utilised more efficiently. After all, Musk’s company is going out on a limb in confirming that it wants to launch the Cybercab service and the long-overdue Tesla Semi electric truck into series production in 2026.
Diversification as the key to stability
An entire section of the annual report is devoted to Tesla’s robotaxi service, which was launched in Austin in the third quarter. The electric car manufacturer emphasises that this service has already been expanded, and another branch has been introduced in the San Francisco Bay Area. Tesla also announced that it plans to open its lithium refinery in Texas in the final quarter of 2025 to strengthen its own battery supply chain and to start up its LFP production lines in Nevada in early 2026.
Diversification in this area, as well as investments in AI, software and fleet services, and charging infrastructure, are intended to make Tesla less dependent on pure car sales. The company aims to protect itself against geopolitical uncertainties, specifically changing global trade and tax policies on the supply chains of the automotive and energy industries. The company also acknowledged that its own cost structure and demand are not entirely within its control. The manufacturer therefore intends to conserve its capital and make only prudent investments in the coming period in order to focus its vehicle, energy and other future business areas on growth.
ir.tesla.com
This article was first published by Cora Werwitzke for Ev Authority’s German edition.
