Tesla (NASDAQ: TSLA) reports Q3 2025 earnings after the bell on Wednesday, in one of its most closely watched updates in years.
The company has posted record vehicle deliveries and energy storage deployments, but profit margins remain under pressure as competition heats up, prices fall, and subsidies expire.
Tesla Q3 Earnings: What Wall Street Is Expecting
Wall Street expects revenue of about $26.3 billion, up roughly 5% from a year ago. But earnings per share are projected to be around $0.55, down more than 23% year over year. Investors want to see whether record sales can still translate into solid profits.
Tesla recently announced a cheaper version of its Model Y SUV, starting at about $39,990 in the United States. Shipments of the new “Standard” trim are expected in late Q4. The move is aimed at offsetting the decline in demand with the expiration of the federal electric vehicle tax credit, but could also be a drag on margins if lower prices aren’t matched by lower costs.
Tesla delivered over 497,000 EVs in Q3 2025, a record high, as buyers rushed to purchase electric vehicles before the subsidy expired on September 30. The delivery number was up about 7% year-over-year. The company’s energy business continues to grow rapidly, with 12.5 GWh of storage deployed in Q3 — also a new record.
Tesla (NASDAQ: TSLA) Stock Continues Fall Rally
Tesla shares have rallied sharply this fall, climbing back above $440, and are now up roughly 17% for the year after plunging 50% in the first quarter. The stock’s rebound has been fueled by optimism around autonomy, AI, and energy — even as analysts debate whether the valuation is justified.
Tesla trades at more than 170 times forward earnings, a multiple far higher than its auto peers. But CEO Elon Musk continues to cast Tesla as a technology and AI company rather than a traditional automaker — one with the potential to unlock new, higher-margin revenue streams beyond vehicles, from software and autonomy to robotics.
If and when that is possible has divided the Street, reflecting a divergence in price targets. The average Wall Street target is around $325–$330, implying limited upside from current levels. Bullish analysts at Wedbush see a path to $600, citing Tesla’s potential as a long-term AI and robotics play, but also a more immediate bounce back in China sales.
Others remain cautious, warning that Tesla remains overvalued as falling vehicle prices and intensifying competition threaten profitability through 2026.
BNP Paribas Exane analyst James Picariello estimates that Tesla’s AI-driven ventures — including its robotaxi program and the Optimus humanoid robot — now account for roughly 75% of the company’s market value, underscoring how heavily the stock depends on technologies that have yet to generate meaningful revenue.
What Analysts Are Watching
Analysts this week will be closely watching how Tesla defends margins, sustains demand, and outlines a credible growth path. They’ll also look for meaningful updates on robotaxi deployment, Cybercab production, and a potential tie-up with Musk’s AI startup xAI initiative.
Guidance will be crucial, especially around Q4 demand and Tesla’s 2026 margin outlook. Tesla is expected to take a double hit from the expiration of key U.S. regulatory incentives — including the federal EV tax credit and both zero-emission vehicle (ZEV) and Corporate Average Fuel Economy (CAFE) credits. Those credits, which have helped pad Tesla’s gross profit in recent quarters, are now effectively exhausted, removing a key tailwind that once boosted margins.
That makes Tesla’s near-term performance more dependent on pure operating efficiency and cost control. If management shows progress on stabilizing margins, offsetting lost credits, and successfully ramping the lower-cost Model Y, the stock’s fall rally could extend further. But if margins weaken or guidance disappoints, investors may see Wednesday’s report as a signal that Tesla’s profit expansion promise is starting to fade.
Tesla stock is ultimately an AI and robotics play right now — but those segments still contribute only a small fraction of total revenue. Analysts and investors will want to know when that vision begins to materially appear in Tesla’s results.
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