After Tesla's Q3 report, risks began to emerge

After the market closed on October 22, 2025, Tesla released its Q3 earnings. Compared to the company's strong secondary market performance, the Q3 report was quite disappointing. The post-market decline in the stock price also reflected investors' views on the company's performance.

Specifically, in 25Q3, Tesla achieved revenue of $28.1 billion, up 11.6% YoY, slightly above market expectations of $27.8 billion. The gross margin was 17.99%, down 1.9 percentage points YoY but above the market expectation of 17.4%. Net profit attributable to shareholders was 1.373 billion yuan, down 36.8% YoY but up 17.2% QoQ, significantly below the market expectation of 1.62 billion yuan.

Although the company's deliveries exceeded 490,000 units, setting a new record, the weak performance in the profit segment inevitably disappointed investors.

In Q3 2025, Tesla delivered 497,000 vehicles, up 29% QoQ, exceeding expectations and setting a new high. Moreover, Tesla did not engage in price cuts or promotions in Q3, and the per-vehicle revenue level was relatively good. However, the revenue growth did not translate into the profit segment due to high early costs for the new Model Y, tariffs, and changes in the sales structure, which offset the reduction in raw material costs. Tariffs alone impacted Tesla by approximately $400 million.

Tesla's energy business, however, slightly underperformed expectations, with revenue of $3.4 billion, below the market expectation of $3.6 billion, mainly due to product mix changes.

In other income, regulatory credits declined, and one-time FSD revenue decreased. Meanwhile, the expense side added $240 million in restructuring costs.

Previously, market expectations for Q3 performance improvement were high, but this time, the company's performance indeed fell short of expectations.

Recently, Tesla has been significantly affected by policies. If carbon credits are canceled, Tesla would directly turn to a loss in 25Q1 (25Q1 GAAP profit was $410 million), with full-year carbon credit profits reduced by $2.5–2.7 billion.

Another factor pressuring Tesla's stock price is the somewhat lackluster tech guidance:

First, the company's autonomous Robotaxi achieved unmanned operations in Austin this year, driving 250,000 miles, with plans to expand to three more states by year-end, largely in line with expectations.

Second, the paid adoption rate for Tesla's Full Self-Driving (FSD) was around 12%, with regulatory cooperation in China, Europe, Africa, and the Middle East. This figure was below market expectations.

Third, the company's capital expenditure this year is $9 billion, with a significant increase expected in 2026, but the company will be more cautious with investments.

Fourth, the robot guidance was somewhat confusing, with the launch event postponed from November this year to Q1 next year, but mass production is proceeding as planned, expected to begin in February–March next year.

For now, Tesla is aiming for a better product presentation, opting to launch V3 in Q1 next year, while mass production will proceed normally, and the solution will continue to iterate.

Previously, Tesla proposed a trillion-dollar compensation package for Musk and exceeded Q3 delivery expectations, raising market expectations for performance and tech guidance. However, given Tesla's strategy, it is unlikely to deliver anything significantly beyond expectations before the shareholder meeting and Musk's trillion-dollar compensation are finalized. The outcome of the shareholder meeting on November 7 will be a key factor influencing Tesla's stock price in the near term. Relatively speaking, we should remain cautious.

Earnings call highlights regarding robots:

1. Tesla is not just a car and battery company, but manufacturing the Optimus robot is extremely challenging.

Tesla uniquely combines real-world AI, exceptional electrical and mechanical engineering capabilities, and scalable production capacity.

2. Optimus Robot: Currently has basic mobility (can walk in parks), conducts 24/7 patrols at headquarters, and can guide visitors to designated meeting rooms or destinations. Optimus V3 is expected to launch in Q1 2026 or earlier.

3. Multidimensional technical challenges: Includes program control, software engineering, hardware training, general mobility models, training tasks, specific model development, voice model R&D, and more.

4. Dexterous hand engineering challenge: The integration of the hand and forearm is highly complex—it must replicate human hand-drive logic (hand-control muscles are mainly in the forearm). The assembly of Optimus's hand and forearm is a complex engineering challenge, and the mechatronic complexity of the forearm far exceeds other parts of the robot.

5. Supply chain gaps: Humanoid robots have no existing supply chain; vertical integration is required, with deep involvement in producing components across the chain. This is entirely different from products like cars and computers, which have mature supply chains.

6. Narrative expansion: Plans to build a production line for 1 million humanoid robots annually (around late 2026), but reaching actual annual capacity of 1 million units will take time, depending on the slowest component in the expansion. Long-term: 5k–100 million units.$Tesla(TSLA.US)