Tesla delivered a record number of vehicles in the third quarter of 2025. This achievement was largely driven by a rush of customers in the United States who took advantage of the expiring federal EV tax credit. However, this record quarter did not lead to greater earnings. In fact, Tesla’s third-quarter profit was 37 percent lower than it was in the same quarter last year.
The company shipped 497,099 cars in the third quarter, generating 21.2 billion dollars in automotive revenue. This is the company’s best revenue figure in more than a year. Despite this, Tesla only pulled in a profit of 1.4 billion dollars, which is up just 200 million dollars from the second quarter of this year.
A significant increase in operating expenses was one of the main reasons for the lower profits. Operating expenses were 50 percent higher compared to the third quarter last year. This increase was due to spending on artificial intelligence and other research and development projects. It also included restructuring charges of nearly 240 million dollars. Tesla did not explain what these restructuring charges were for, but they are possibly related to the recent decision to shut down the company’s six-year Dojo supercomputer project.
Tesla also cited tariffs as another drag on profits this past quarter. This means the man CEO Elon Musk spent around 300 million dollars to help elect as president has hurt the company’s business.
This situation puts even more pressure on the company’s final quarter of the year. Tesla already needs another record quarter, and then some, if it wants to simply match the number of cars it shipped in 2024 or 2023. The company could get some help from the new slightly cheaper stripped-down versions of the Model 3 and Model Y electric vehicles. But even in that best-case scenario, Tesla is way off the path of 50 percent year-over-year growth that it once promised to investors and shareholders.
Elon Musk has spent the last few years trying to get shareholders, investors, employees, and everyone else to look beyond the company’s core business of making and selling cars. He has bet the future of Tesla on being able to create a vast network of self-driving vehicles that he thinks can challenge Uber. He also thinks the humanoid robot, Optimus, will become the best-selling product ever. Tesla offered little new information on those programs in its recent shareholder letter.
All of this is happening amid the backdrop of Tesla’s proposal to hand one trillion dollars worth of shares to Musk. That plan is up for a vote at the company’s annual shareholder meeting in a few weeks. The company and Musk are campaigning hard for its approval. While advisor groups like ISS and Glass Lewis are recommending against the pay package, it is most likely going to pass given the overwhelming support from shareholders on previous efforts. That has not stopped Musk from threatening to walk away from Tesla if the package is not approved.