Tesla reports steep drop in profits despite US rush to buy electric vehicles

Core Insights - Tesla experienced a significant drop in profit despite record vehicle sales, attributed to a rush in purchases before the expiration of US tax credits for electric vehicles [1][3] - The company reported third-quarter earnings of 50 cents per share, falling short of the 54 cents predicted by analysts, while revenue exceeded expectations at $26.457 billion [2] Financial Performance - Tesla's operating income was reported at $1.62 billion, slightly below the expected $1.65 billion, and net income dropped to $1.4 billion, a 37% decrease from $2.2 billion [2] - The surge in deliveries was linked to consumers trying to secure tax credits before they expired, impacting sales forecasts [3] Strategic Initiatives - The company emphasized its commitment to AI software and autonomous driving technology, with Musk claiming Tesla's capabilities in real-world AI are unmatched [4] - Musk mentioned the potential of Tesla's Optimus robots to become "the biggest product of all time" [4] Leadership and Governance - Tesla's CEO is seeking investor approval for a $1 trillion pay package, contingent on achieving an $8.5 trillion market cap over the next decade [6] - Two proxy advisory firms, Glass Lewis and ISS, have recommended against the pay package, which has led to criticism from both Tesla and Musk [7][11] Market Position and Competition - Tesla's stock has seen a rally over the past six months, despite facing heightened competition and a loss of key tax credits [12][13] - The introduction of the Model Y sedan aimed to boost sales, but its pricing has drawn criticism compared to lower-cost competitors [14]