Tesla Q3 2026 Earnings Miss Expectations as Profit Slides

Tesla’s Q3 2026 earnings show a profit decline despite revenue holding steady. The automaker reported $28.05 billion in revenue, flat from a year ago, and non-GAAP earnings of $0.48 per share, beating expectations but still down 4% from $0.50 a year ago. The results come as Tesla continues to face challenges in maintaining profit growth.

The automaker delivered 486,532 vehicles in Q3, down 2.1% year-over-year but well ahead of the 461,974 consensus, while producing only 464,391. However, the company’s operating income fell 56% year-over-year as spending on AI and Optimus grew faster than gross profit. On a GAAP basis, net income dropped 43% to $787 million, or $0.22 per share.

Total gross margin was 19.6%, up 160 basis points from 18.0% a year ago and well above the 16.8% Tesla posted in Q2. But operating expenses rose 39% year-over-year to $4.78 billion, driven by research and development spending on “Super Intelligence,” Optimus, and the Cybercab. Stock-based compensation also increased to $1.17 billion, up from $663 million a year ago.

Capital spending reached $4.73 billion, more than double the $2.25 billion of a year ago, and free cash flow came in at $1.53 billion, compared with $3.99 billion a year ago and negative $1.09 billion in Q2. Tesla ended the quarter with $45.4 billion in cash and investments, but its capex for the first nine months of 2026 was only about half of the “more than $25 billion” management guided for the year.

Tesla blames battery availability for the flat sales and says it ended Q3 with “the largest backlog for our passenger vehicles in four years.” Despite this, average selling prices fell again, which isn’t usually what a supply-constrained automaker does. The company also reported that active FSD subscriptions reached 1.74 million, up 67%, though that count includes upfront purchases.

The company’s earnings call with management is scheduled for 5:30 p.m. ET, where it will provide further insight into its financial performance and future plans.

Tesla’s full Q3 2026 shareholder deck is available on the company’s investor relations site, and management will discuss the results on the earnings call at 5:30 p.m. ET.

This is a developing story. We’ll add the most important updates from Tesla’s shareholder letter and earnings call here as they come.