Electric vehicle (EV) maker Tesla reported a total revenue of $28.1 billion for the third quarter of 2025, a 12% year-over-year (YoY) increase from $25.1 billion. The company attributed the increase to higher vehicle deliveries and strong growth in its energy business.

However, total revenue missed analysts’ estimates by $1.39 billion.

Net income fell 29% to $1.77 billion compared to $2.50 billion in Q3 of 2024, while diluted earnings per share (EPS) decreased to $0.50 from $0.72 a year ago. The EPS also missed analysts’ expectations by $0.06.

Chief Financial Officer Vaibhav Taneja said, “We set new records, not just for deliveries and deployments, but also around a range of financial metrics from total revenues, energy gross profit, energy margins to free cash flow.” He added that customer confidence underpinned the company’s strong performance despite margin pressures.

Automotive revenues for Q3 totaled $21.2 billion, up from $20.01 billion in Q3 last year, reflecting a 6% YoY increase. Energy generation and storage revenue rose 44% to $3.41 billion, up from $2.37 billion in the same quarter of the previous year.

Services and other revenue increased 25% sequentially to $3.47 billion, from $2.79 billion in Q2.

Overall, Tesla’s total deliveries reached 497,099 vehicles, up 7% YoY, while global vehicle inventory dropped to 10 days of supply, down 47% from the previous year.

“The strength in deliveries was attributed to strong performance across all regions. Greater China and the Asia-Pacific regions were up sequentially by 33% and 29%, respectively. North America was up 28%, while Europe, the Middle East, and Africa were up 25%,” Taneja said.

The company generated a record free cash flow of approximately $4 billion during the quarter. However, the company’s performance was affected by tariffs, resulting in a total impact exceeding $400 million, split roughly evenly between its automotive and energy segments.

Taneja elaborated, “This business has a bigger impact from tariffs as measured by a percentage of cost of goods sold since currently all sales procured are from China, while we are still working on other alternatives. However, as the ramp of megafactory Shanghai is happening, this is helping us avoid tariffs because we are using this factory to supply the non-US demand.”

During the quarter, Tesla expanded its vehicle lineup across multiple regions and began leasing pre-owned vehicles to strengthen its market position and utilization of existing factories. Deliveries also began in India during the quarter.

In April this year, Tesla reported a net income of $934 million for the first quarter (Q1) of 2025, a drop of 39% year-over-year (YoY) from $1.54 billion.