Electric vehicle maker Tesla (TSLA) released its earnings results for the third quarter of fiscal year 2025 on Wednesday, with its operating profit dropping 40% to $1.62 billion.
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This is despite the company earlier reporting record vehicle deliveries for the same period. Its shares fell more than 3% during early trading on Thursday. Wall Street analysts have begun to react to the news, with Jefferies analyst Philippe Houchois describing the earnings event as having “more repetition than news.”
Below are other key takeaways from the earnings call.
Tesla’s Revenue Jumps to $28.1 Billion
Despite reporting earnings per share of $0.50, below Wall Street’s expectations of 55 cents per share, Tesla’s revenue jumped 12% year over year to $28.1 billion, propelled by higher global vehicle deliveries and expansion in energy generation and storage. Yet, the growth was tempered by a 44% plunge in Tesla’s lower earnings from selling environmental credits to other automakers that need them to meet government standards.
Also important to note, Tesla’s free cash flow rose dramatically from $146 million to nearly $4 billion, showing that the EV maker has more cash to fund its expansion.
Elon Musk Rides Robotaxi Dream
During the event, CEO Elon Musk outlined big plans for the company’s future, including the rollout of robotaxis. Musk noted that the company is “scaling quite massively” in this regard, and further boasted that the Tesla vehicles have the “highest intelligence density of any AI [system] out there.”
Furthermore, Musk assured that its robotaxis will require no safety drivers in Austin within the next few months. The CEO added that the company is looking to operate the robotaxi in about eight to 10 metro areas in Nevada, Florida, and Arizona, among others, by the end of the year.
This comes as Tesla continues to expand its full self-driving (FSD) testing efforts amid criticism, including from U.S. lawmakers.
Execs Highlight Full Self-Driving Plans
During the call, Vaibhav Taneja, Tesla’s chief financial officer, also noted that the company continues to record “decent progress” in the adoption of its FSD vehicles. Taneja disclosed that increased production at the company’s megafactory in Shanghai, China, has enabled the EV maker to better handle tariff-related costs.
Adding to this, Musk noted that people are “quite amazed” by the self-driving capabilities of Version 14 of Tesla’s FSD software, which was released earlier this month.
Chipping in, Mike Donoughe, the executive vice president of vehicle engineering and manufacturing, pointed out that Tesla is meeting its planned timeline for producing its electric semi trucks, with large-scale production set to begin in the second half of next year.
Musk Hypes Tesla’s AI, ‘Incredible’ Optimus Robot
In the robotics space, Musk continued to boast about the company’s humanoid robots. The billionaire chief executive noted that the Optimus robot will be “so real people will need to poke it to see that it’s not real”. He even added that the robot will become an “incredible surgeon.”
On Tesla’s push for artificial intelligence, Musk noted that the A15 chip, the next-generation of Tesla’s AI processors designed for its FSD and robotics products, will be 40 times better than the earlier A14 version.
Musk Responds to Criticism on $1 Trillion Pay Package
Tesla’s board proposal to pay Musk $1 trillion in total compensation if specific ambitious targets are met also drew attention during the event. While Taneja enjoined stakeholders to vote for the package, Musk called two key shareholders who had been lampooning it “corporate terrorists” who had previously championed “many terrible” ideas.
Shareholders will vote on the proposal on November 6 this year. If approved, the package will make Musk the first trillion-dollar chief executive in the world.
Is Tesla a Buy, Sell, or Hold?
Meanwhile, Tesla’s shares currently have a Hold rating on Wall Street. This is based on 15 Buys, 13 Holds, and 10 Sells assigned by 38 Wall Street analysts over the past three months. Moreover, the average TSLA price target of $363.50 indicates more than 17% downside risk.
