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Vol. 3 · No. 298 Every side. Side by side. Sunday, October 25, 2026
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Tesla's third-quarter profit falls as spending on AI and robotics climbs

Tesla said Wednesday its third-quarter net income fell to $787 million, or 22 cents a share, as capital spending on AI and robotics more than doubled, a day after Elon Musk said Tesla and SpaceX are studying a merger [1][2][7].

By AI reporterBenny Sato · WhatsNewPaper Desk
What's new
  1. Our desk updated its story
  2. KSAT is now reporting this
  3. Electrek is now reporting this
  4. Our desk updated its story
  5. Stock Titan and Yahoo Finance are now reporting this
15 earlier updates
  1. New headline Was: “SpaceX and Tesla form committees to study a possible merger, Musk says”
  2. Our desk updated its story
  3. Ars Technica (share link, same article as [6]) is now reporting this
  4. Our desk updated its story
  5. Local 10 (Associated Press), ClickOnDetroit (Associated Press) and The Philadelphia Inquirer (Associated Press) are now reporting this
  6. Our desk updated its story
  7. Local 10 and ClickOnDetroit are now reporting this
  8. Our desk updated its story
  9. The Philadelphia Inquirer is now reporting this
  10. ClickOrlando (Associated Press) is now reporting this
  11. Our desk updated its story
  12. ClickOrlando is now reporting this
  13. Tesla, Inc. (SEC filing) is now reporting this
  14. Our desk updated its story
  15. Our desk updated its story

Wire reporting: (AP, via Local 10)

Primary sources: Tesla Q3 2026 update (8-K Ex. 99.1), Tesla Q3 2026 production and deliveries release

Tesla reported third-quarter net income of $787 million, or 22 cents a share, on Wednesday, down from $1.37 billion, or 39 cents a share, a year earlier, as it spent more on artificial intelligence and robotics1,2,7.

Revenue was $28.05 billion, roughly level with the same quarter last year1,2. Excluding stock compensation and some other items, Tesla earned 48 cents a share, above the 43 cents analysts polled by LSEG expected, CNBC reported2, and above the 45 cents in the consensus Tesla compiles, according to Stock Titan1.

Automotive revenue fell 3% to $20.56 billion and energy generation and storage revenue fell 16% to $2.88 billion, CNBC reported2. Tesla delivered 486,532 vehicles in the quarter, down about 2% from a year earlier1,4.

Operating income dropped to $718 million from $1.62 billion, leaving an operating margin of 2.6%, according to Stock Titan's breakdown of Tesla's quarterly update1.

Capital spending more than doubled from a year earlier to $4.73 billion, according to Tesla's quarterly update filed with the SEC, down from $5.79 billion in the second quarter1,4,7. Free cash flow was $1.53 billion, positive after a negative second quarter but below the year-earlier figure1,2,4,7.

The report came a day after Chief Executive Elon Musk said on SpaceX's earnings call that both companies had formed special committees of independent directors to study a merger and that shareholders would have to support any deal2,12. "I'm a conflicted party; I can't actually be in the discussions of the special committees," Musk said, according to Ars Technica12. The committees have not agreed on terms, and a deal would need approval from half of all Tesla shareholders, not only those who vote10,12. Musk holds more than 82% of SpaceX's voting power and about 20% of Tesla's, Ars Technica reported, citing SpaceX's IPO filings12. On Tesla's Wednesday call, he said he had nothing more to add and that calling a merger certain would be overstating it, the BBC reported8.

On Wednesday's earnings call, Tesla said it expects to start adding some customer-owned cars to its robotaxi fleet around the second quarter of 20275,6. Ashok Elluswamy, Tesla's vice president for autonomous driving, said the remaining step is bringing owners' cars into the geofences and fleet management Tesla uses for its driverless vehicles5. "We suspect somewhere around Q2 next year is when we can turn on some of the first customer vehicles to be part of the robotaxi fleet," he said, according to The Verge5. Electrek reported that those cars would drive themselves only inside the zones where Tesla's robotaxi service already operates6. The outlets gave different mileage figures: The Verge said Tesla's new robotaxi safety website claims 3.3 million autonomous miles5, while Electrek, citing Tesla's third-quarter results, said the service had logged nearly 2 million unsupervised miles by the end of the quarter6.

Sources

  1. Stock TitanTesla Q3 2026 Earnings: Spending Slows, Free Cash Flow Turns Positive
  2. CNBCTesla beats on earnings and sales even as auto revenue declines
  3. New York TimesTesla Earnings Show Profit Declines Amid Talks to Merge With SpaceX
  4. Yahoo FinanceTesla reports Q3 earnings beat, free cash flow, and better than expected capex
  5. (AP, via Local 10)Tesla's Q3 profit drops as it prepares for possible merger with Musk's other public company, SpaceXAlso (AP, via KSAT)
  1. The VergeTesla says customers can add their own vehicles to the robotaxi fleet next year — will it happen?
  2. ElectrekTesla pushes unsupervised FSD to Q2 2027, and only inside Robotaxi zones
  3. Tesla Q3 2026 update (8-K Ex. 99.1)Tesla Q3 2026 Update (Exhibit 99.1 to Form 8-K)
  4. BBCWhy is Elon Musk plotting a mega-merger of SpaceX and Tesla?
  5. The GuardianTesla and SpaceX explore merger as Elon Musk gives backing
  6. EngadgetSpaceX and Tesla are exploring a possible merger
  7. Ars TechnicaMerging SpaceX and Tesla would be a "good idea," Musk says

Read the original at Stock Titan ↗

How it’s being reported

12 versions from 11 sources
CNBCNew York TimesThe Verge