Summary
As the smoke clears from its outrageous Roadster demo, Tesla reported Q3 earnings on Wednesday — and the cold reality is that revenue has flatlined.
Flying Roadsters can’t lift Tesla’s flat Q3 revenues
Flat revenue and a 4 percent profit drop show that no amount of rocket thrusters can disguise Tesla’s troubles.
Flat revenue and a 4 percent profit drop show that no amount of rocket thrusters can disguise Tesla’s troubles.
Tesla said it earned 28.0 billion in revenue in the quarter that ended in September 2026. Revenues were flat, while profits dropped 4 percent compared to the third quarter of 2025, when the company earned 28.1 billion in revenue. Tesla’s revenue came in above Wall Street expectations of 28.3 billion.
The earnings come on the heels of a disappointing Q3 sales report, in which Tesla reported a 2.1 percent drop in customer deliveries compared to the blockbuster third quarter of 2025. (For a direct-to-consumer company like Tesla, deliveries are a proxy for sales.) The drop in sales was widely expected thanks to the expiration of the 20.5 billion, a 3 percent decrease year over year — a sign that the company’s car business is floundering after the elimination of the tax credit. But there were troubling signs for Tesla’s other businesses too; the company reported 4.6 billion – a rare bright spot in an otherwise dour earnings report.
Operarting expenses — the day to day costs of running Tesla’s business — was up 39 percent year over year to 718 million.
On the brighter side, Tesla reported a free cash flow of $1.5 billion, after dipping into negative territory last year. Still, that figure represents a 62 percent drop year over year, a sign that Tesla’s operating revenues were still struggling to cover its capital expenditures.
The possibility of a Tesla-SpaceX merger gained new momentum after Musk’s revelation this week that the two companies had formed special committees to discuss the possibility. Musk said a merger would be a “good idea,” even though he claimed he wouldn’t be involved in the process.
Beyond merger talks, this past quarter also saw the highly anticipated re-reveal of the next-generation Tesla Roadster, nine years after it was initially announced. The demo in Waco, Texas, featured a redesigned two-seat prototype flying and flipping through the air using cold-gas thrusters provided by SpaceX. While the event generated its own cottage industry of online reactions, it did little to asauge skeptics that the vehicle would actually go into production in 2028, as promised.
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