Tesla's Q3 earnings miss: What investors need to know

Financial Performance - Tesla's Q3 adjusted EPS is $0.50, versus consensus at $0.54 [1] - Tesla's Q3 revenue is $28.10 billion, beating the street's expectation of $26.36 billion [1] - Tesla's Q3 gross margins look better than expected at 18% versus an estimate at 7.2% [1][2] - Tesla's Q3 free cash flow is $3.99 billion, beating the estimate of $1.25 billion [2] Market Dynamics & Future Outlook - The market is concerned about EV demand in the post-EV tax credit world, especially in the US [3] - Analysts anticipate a decline in Q4 deliveries and total global deliveries for Tesla in 2026 due to the US tax credit expiration, mirroring the German market experience in 2024 [7][8] - Lower-priced Tesla models may attract some buyers, but they still require a higher upfront cost compared to mid-size SUVs like Honda CRV and Toyota Rav 4 [9][10][11][12] AI & Autonomous Driving - The most important chapter in Tesla's growth story is beginning with the AI era, starting with autonomous driving and robotics, with autonomous valuation potentially worth $1 trillion [14] - Morningstar estimates over half of Tesla's $250 fair value comes from full self-driving subscriptions, robo taxi, and Dojo [15] - Regulatory uncertainty in Europe and data export issues in China pose challenges to Tesla's robo taxi market leadership [16][17] - The key to robo taxi success is the software's functionality, safety, and ability to operate without a safety driver or geo-fenced area [19][20] Shareholder Meeting - Shareholders are expected to approve Musk's potential $8.5 trillion pay package, incentivizing him to grow Tesla's market cap and successfully roll out robo taxis, Optimus robots, and full self-driving software [23][24]