Tesla Stock Falters Despite Better-Than-Expected Q3 Earnings, It's Still a Carmaker
Coming right after SpaceX’s earnings call on Tuesday, Tesla’s earnings call produced a lukewarm reaction even among the company’s biggest fans. Everyone was in agreement that SpaceX has produced a much more consistent performance than Tesla, even though Elon Musk headed both calls. Unsurprisingly, even though Tesla had a lot to brag about, the stock fell more than 5% after closing.
The good news was that Tesla beat Wall Street estimates as far as free cash flow and capex spending are concerned. The reported free cash flow was $1.53 billion against estimates of -$4.92 billion. At the same time, capital expenditures were lower than expected, at $4.732 billion vs $7.96 billion for the quarter. Tesla now expects full-year capex to top at $20 billion instead of the previously guided $25 billion.
The third-quarter revenue came in flat, at $28.046 billion vs $28.095 billion in 2025, slightly below analyst consensus of about $28.13 billion. Automotive revenue in the quarter dropped 3% to $20.560 billion from 2025, while Energy generation and storage saw an unexpected 16% drop to $2.881 billion. The bright spot was in the services department, which ballooned 33% in the quarter to $4.605 billion. Supercharger, insurance, and parts sales were cited as the main contributors.
These numbers are useful to investors who want to see how Tesla is navigating through so many storms, including geopolitical risks, tariffs, and supply chain disruptions. However, they don’t tell the whole story, which is why the earnings call is such a useful tool to both media and investors. As disappointing as the Q3 earnings call was for some, it still provided great information about Tesla’s plans.
Since I’m a car guy, I am mostly excited about Tesla’s announced plans to expand its vehicle manufacturing capacity. This was rather surprising, considering that Tesla hasn’t maxed out its current capacity yet. During the call, Elon Musk announced that Tesla aims for 5 million vehicles per year by 2030. Could this be a sign that it plans new vehicle models?
Tesla also announced that it reached 1.74 million active FSD subscriptions in Q3 2026. Musk said that over 75% of new vehicles are ordered with a paid FSD subscription. This made him believe that people are now “buying FSD with a car attached, not the other way around.”
Musk also announced that Unsupervised FSD should roll out in the second quarter of 2027 with FSD V15. When this happens, Tesla owners in geofenced areas will be able to enroll their cars in the Robotaxi network. Tesla Robotaxi app has already included strings to implement such a feature, as decompiled software revealed.
Q3 Shareholder Update → https://t.co/u0UcDOuMNa Highlights – FSD Supervised attach rate grew to over 75% of new vehicle deliveries in NA – Unveiled the next-gen Roadster – Record deliveries in Canada, Australia, Japan & Taiwan – Tesla Semi now in volume production. Top variant can go up to 500 miles at a full 82,000 lbs while achieving efficiency of 1.7 kWh/mile – about a third of the energy a comparable diesel truck burns for the same load – Ended the quarter with the largest backlog for our passenger vehicles in 4 years! FSD Supervised – 4 new approvals since Q2 (Croatia, Slovenia, Czech Republic, Slovakia) – FSD is now live in nine EU countries & used by over 100,000 customers logging more than 160 million kilometers since initial approval Robotaxi – Deployed Cybercab into our Austin fleet – Hit nearly 2 million cumulative unsupervised miles, 8x growth in the quarter – Austin service now runs 6 am to midnight, with wait times continuing to come down as we add cars & improve the orchestration algorithms – Added Grok to Cybercab with Grok Bot & Connectors, letting you interface with your inbox, calendar, files, chats and tasks, all by voice. Transport, office & living room in one Robotics – Started production of @Tesla_Optimus on our high-volume lines in Fremont. These are the first production-quality bots we’ve built, proving that the current manufacturing process for Optimus is suitable for a commercial product SI Compute – On track for 400 MW of training compute by year end, feeding both vehicle & humanoid autonomy – Austin Fab construction continues, equipment commissioning planned for 2027 Battery – Battery supply is still the limiter on how fast we ramp vehicles globally, so we’re expanding on every front: pack capacity in Berlin, cathode and lithium refining in Texas, LFP cells in Nevada – Shipped the first Megapacks built entirely with our own LFP cells – Increasing 4680 output to support ramp of Cybercab, Semi & Model Y Energy – Megafactory Texas is up & running, with Megapack 3 production started – Highest-ever order rate & backlog for energy storage Grid constraints & power availability are making Megapack the answer for SI infrastructure demand: it excels at supplying large data center loads, smooths out demand spikes, helps new projects meet grid connection rules & makes the grid itself more stable All with less local fossil fuel generation Supporting Infrastructure – Added 2,100+ net new Supercharger stalls, up 14% year over year
— Tesla (@Tesla) October 21, 2026