By John Meyer, consultant in financial affairs – Eurasia Business News, October 22, 2025. Article No 1849

Tesla’s third-quarter 2025 earnings report showed a sharp decline in profit despite a rush of purchases driven by U.S. consumers eager to benefit from an expiring federal tax credit for electric vehicles. The company’s total revenue rose 12% year-over-year to about $28.1 billion, exceeding expectations, supported by record vehicle deliveries of over 497,000 units and record energy storage deployments.

However, Tesla’s operating income fell by 40% year-over-year to $1.6 billion, indicating squeezed profit margins despite the surge in sales. The introduction of lower-cost Model 3 and Model Y standard variants, priced $5,000 to $5,500 less than prior models, plus temporary discounted lease rates on premium versions, pressured margins. Additionally, heightened global competition and pricing promotions further contributed to the profit decline.

Tesla posted non-GAAP earnings per share of $0.50 versus a FactSet consensus of around $0.56, marking a decline from the previous year’s $0.72 per share. CEO Elon Musk is expected to address these margin pressures and updates on Tesla’s robotaxi ambitions during the earnings call. Overall, Tesla’s quarter was characterized by record revenue and deliveries but profit margins under notable strain amid competitive and price-cuts environment.

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Tesla’s Q2 2025 vehicle deliveries had already plunged sharply due to a combination of demand challenges, political backlash, and fierce competition, signaling a difficult phase for the automaker as it navigates a changing EV market landscape.

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© Copyright 2025 – Eurasia Business News. Article no. 1849.