SILICON VALLEY — Tesla, the electric-vehicle maker led by Elon Musk, cut its annual investment outlook by $5 billion. The company has been trying to shift its EV-centered business toward artificial intelligence and humanoid robots, but progress has been slower than expected. Shares turned lower in after-hours trading as AI investment came in below expectations and EV sales proved sluggish.
Tesla reported third-quarter revenue of $28.05 billion in a regulatory filing on the 21st. That was roughly flat from $28.1 billion a year earlier and slightly above the $27.9 billion median estimate of analysts surveyed by the London Stock Exchange Group.
Adjusted net profit fell 4% from a year earlier to $1.7 billion, just above the $1.6 billion expected on Wall Street. Earnings per share came in at 48 cents, topping the 43-cent consensus estimate.
Total revenue was little changed from a year earlier because gains elsewhere were offset by declines in the core businesses. Other revenue sources, including subscription services, rose 33%, while automotive revenue fell 3% and energy storage revenue dropped 16%. Tesla delivered 486,532 vehicles in the third quarter, down 2% from a year earlier, after halting production of the Model S and Model X to focus on the Optimus humanoid robot, the Cybercab robotaxi and the Semi electric truck. Weak demand for the Cybertruck also weighed on sales. Subscribers to Tesla's Full Self-Driving service, meanwhile, rose 67% from a year earlier to 1.74 million.
Tesla attributed the sales shortfall to a battery supply shortage. The company produces battery cells at its 4680 plant in Texas, with annual capacity of more than 40 gigawatt-hours — enough to supply about 500,000 vehicles a year based on an average 80-kilowatt-hour pack. Bloomberg said Tesla should have no trouble securing additional cells from Korean battery makers with U.S. plants, but may face constraints in obtaining enough batteries for the newly unveiled Cybercab and Semi.
Earnings met expectations, but investment spending fell short. Third-quarter capital expenditures of $4.7 billion more than doubled from a year earlier yet came in well below the $7.9 billion forecast, and were down $1 billion from the previous quarter. Musk in July described 2026 as a "year of massive capital expenditure," but actual spending has trailed that goal. Tesla ultimately lowered its annual capital spending target to $20 billion from more than $25 billion. Shares rose after the earnings release but were down more than 2% as of 6:09 p.m. Eastern time after the company lowered its capital spending outlook late in the earnings call.
Mass production of the Optimus humanoid robot began in the third quarter. Tesla said it had started building Optimus in Fremont, California, demonstrating that its humanoid manufacturing process can be applied to commercial products. "The robots coming off this line are the first volume-production robots we have manufactured," the company said. Tesla said it is working to integrate its AI5 chip into the robots by April next year. The AI5 is produced at Samsung Electronics' (005930.KS) plant in Taylor, Texas.
The timing of Optimus commercialization also remains unclear. Most of the output will be deployed only partially at industrial sites, and the company signaled that the commercial rollout investors are hoping for is still some way off. Musk said that for a humanoid to work properly, "a lot of things have to go perfectly right," adding that production requires building a global supply chain and large domestic factories. "I expect these issues to be resolved around the end of next year," he said, adding that by then the company expects to be able to supply robots to companies other than Tesla.
Musk had earlier played down expectations for how quickly Optimus output could be scaled up, saying the ramp would be "extremely slow." Bloomberg said Musk "focused on tamping down excessive expectations for Optimus commercialization," adding that while his explanation was lengthy, it felt like an attempt to justify having little to show on the robot front.
