Tesla reports record sales, record storage—but profit slips as tax-credit rush pulls demand forward

Core Insights - Tesla reported record vehicle deliveries of 497,099 units in Q3 2025, alongside record energy storage deployments of 12.5 GWh, but faced earnings pressure due to margin headwinds and a demand pull-forward before the expiration of U.S. EV tax credits [1][6] - Revenue reached approximately $28.1 billion, exceeding expectations, while non-GAAP EPS was around 0.50, which is below the previous year's levels due to compressed automotive margins [1][6] - Shares dipped about 1.4% in after-hours trading as investors anticipated softer demand for the remainder of the year [1] Q3 Results - Total production for Q3 was 447,450 units, indicating an inventory drawdown to meet the surge in demand before the tax credit expiration [6] - Automotive deliveries were primarily driven by Model 3/Y, which accounted for 481,166 deliveries, while "Other Models" contributed 15,933 deliveries [6] Segment Performance - Energy storage deployments reached an all-time high of 12.5 GWh, highlighting its role as a stabilizer with higher margins compared to automotive during competitive pricing periods [6] - Services and other segments were not detailed numerically but are expected to benefit from fleet growth and software advancements [6] Profitability and Margins - Despite record revenue, non-GAAP EPS was approximately 0.50, with auto gross margins (excluding credits) likely in the mid-to-high teens, reflecting ongoing price competition and cost pressures [6] - Net income fell about 37% year-over-year, attributed to margin compression and one-time demand pull-forward effects related to tax policy timing [6] Guidance and Outlook Themes - Analysts and media are focused on post-credit demand trajectory, automotive margins, and the durability of energy growth, particularly how Q4 will shape up after the demand pull-forward [6] - The company maintains a strategic focus on AI/FSD and robotaxi initiatives to support long-term valuation, with investor sensitivity to credible timelines and capability updates in these areas [7]