Zhi Tong Cai Jing·2025-10-23 00:32Core Insights - Tesla reported a 12% year-over-year revenue growth in Q3, reaching approximately $28.1 billion, exceeding Wall Street's expectations of around $26.3 billion [1] - However, Tesla's earnings per share of approximately $0.50 fell short of the expected $0.54, marking a significant year-over-year decline of 31% [1][2] - The company's free cash flow saw a notable increase, reaching nearly $4 billion, a 46% rise compared to the previous year, and significantly above the expected $1.25 billion [1] Revenue and Profitability - Tesla's automotive business revenue grew by about 6% year-over-year, from $20 billion to $21.2 billion in Q3 [2] - Operating expenses surged by 50% to $3.4 billion, influenced by rising costs in the U.S. automotive industry and the anticipated negative impact of U.S. tariff policies estimated at $400 million [2] - The net profit under GAAP decreased by 37% to $1.37 billion, with earnings per share at $0.39, down from $2.17 billion and $0.62 per share in the same period last year [2] Market Dynamics - Tesla's Q3 saw a record high in vehicle deliveries at 497,099 units, with total production at 447,450 units [4] - The company faced challenges in the European market due to declining sales and increased competition from manufacturers like Volkswagen and BYD [4] - The decline in regulatory credit revenue by 44% to $417 million also impacted overall revenue [4] Future Outlook and Strategic Initiatives - Tesla's energy business revenue surged by 44% to $3.42 billion, driven by large backup battery storage systems and solar products [5] - The company is focusing on the development of its full self-driving (FSD) system, with only 12% of its current fleet subscribed to FSD services [10] - Plans for mass production of the Cybercab and Megapack 3 are set for 2026, with expectations for significant advancements in AI and robotics [10][11] Analyst Perspectives - Analysts express concerns over Tesla's growth narrative and profitability trajectory, indicating a period of uncertainty for the company's near- and mid-term earnings growth [7][12] - Some analysts remain optimistic about Tesla's long-term potential, particularly in AI and robotics, with projections of significant market value contributions from these sectors [13][14]