After Record Q3 Deliveries, Can Tesla Deliver an Earnings Beat?

Core Insights - Tesla is set to release its third-quarter 2025 results on October 22, focusing on vehicle deliveries and automotive profit margins [1] - The company has missed earnings estimates in two of the last four quarters, with an average negative surprise of 3.65% [1] Q2 Highlights - In Q2 2025, Tesla produced 410,244 units, a slight decline of 0.1% year over year, missing the estimate of 453,081 units [2] - Vehicle deliveries totaled 384,122, down 13.5% year over year, and also below the estimate of 420,079 units [2] - The Model 3/Y accounted for 373,728 deliveries, reflecting an 11.5% year-over-year decline and falling short of expectations [2] Revenue Performance - Total automotive revenues for Q2 2025 were $16.7 billion, down 16% year over year, and below the estimate of $18.3 billion [3] - Revenues from the sale of regulatory credits decreased by 50.7% year over year, contributing $439 million to the total [3] - Excluding leasing and regulatory credits, automotive sales totaled $15.8 billion, missing projections of $17.4 billion due to lower deliveries [3] Q3 Deliveries and Projections - In Q3 2025, Tesla delivered a record 497,099 vehicles, a 7.4% increase year over year, surpassing the estimate of 435,370 units [4][9] - The expiration of the $7,500 EV tax credit at the end of September likely spurred demand, as customers rushed to purchase vehicles [4] - The Model 3/Y remains the most successful EV, with 481,166 deliveries in Q3, exceeding expectations [5] Revenue Forecasts - Automotive revenues for Q3 are forecasted at $18.8 billion, representing a decline of approximately 6% year over year, but likely stronger due to higher-than-expected deliveries [6] - Despite tariff impacts, the cost of automotive sales is expected to decrease by 1.5% year over year in Q3 2025 [6] Overall Earnings and Revenue Estimates - The Zacks Consensus Estimate for Q3 sales is $26.27 billion, with earnings projected at 52 cents per share [7][9] - The consensus estimate for earnings per share has increased by 2 cents over the past week [7] Earnings Prediction - The model predicts an earnings beat for Tesla, supported by a positive Earnings ESP of +10.08% and a Zacks Rank of 3 (Hold) [8][10]