Tesla said its quarterly profit fell by more than a quarter as the loss of emissions credit trading revenue and the costs of its pivot to robotics and artificial intelligence ate into its margins.
Elon Musk’s carmaker reported that its third-quarter adjusted net income fell 29 per cent to $1.8bn, missing expectations of $1.9bn, according to a filing on Wednesday.
Revenue increased 12 per cent to $28.1bn, against average analyst estimates of $26.6bn from Visible Alpha.
Tesla had been expected to benefit from Musk’s political alliance with the US president. But the backlash over his political activism, sweeping US policy changes around EVs and the public falling out between Trump and the world’s richest man have knocked the carmaker’s fortunes.
Customers have rushed to buy electric cars ahead of the expiry of a $7,500 federal tax credit on September 30, temporarily boosting sales.
Tesla disclosed earlier this month that it delivered a record 497,099 vehicles in the three months to the end of September, up from 462,890 in the same period last year.
However, income from selling regulatory credits plunged 44 per cent to $417mn in the quarter after the US government reduced fines for non-compliance on car emissions standards to zero, in effect killing the trading schemes.
Tesla made $2.8bn in profit from trading schemes last year, with about three-quarters of that coming from the US, the Financial Times has reported.
Operating expenses rose 50 per cent to $3.4bn, with Tesla spending billions acquiring advanced chips to power its ambitions in AI as Musk repositions the company towards autonomous driving, prepares to launch robotaxis and build humanoid robots.
Reported net income fell to $1.4bn, below forecasts of $1.5bn.
Tesla is also lobbying shareholders ahead of its November 6 annual meeting, when there will be a crunch vote on a proposed $1tn share package that the board has argued is necessary to motivate and retain Musk.
Proxy advisers Institutional Shareholder Services and Glass Lewis have counselled investors to vote against the plan. They citied its “striking magnitude” and the lack of binding terms to ensure Musk’s commitment to Tesla as he presides over a growing number of companies from SpaceX to xAI and engages in political activism.
