Tesla reported third quarter 2026 revenue of $28.05 billion, missing the $28.34 billion analyst consensus, though GAAP EPS of $0.22 slightly exceeded estimates. Profitability was bolstered by a significant sequential improvement in automotive margins as the company leveraged higher FSD adoption and manufacturing efficiencies to offset lower vehicle average selling prices.
Key Highlights
- Automotive gross margin excluding regulatory credits reached 18.1%, surpassing the 17.9% estimate even as regulatory credit revenue fell to $113 million.
- Free cash flow improved to $1.53 billion, supported by $6.26 billion in operating cash flow despite $4.73 billion in capital expenditures for AI and robotics.
- The Robotaxi fleet in Austin achieved 2 million cumulative unsupervised miles, while FSD subscriptions reached a record 1.74 million active users.