Tesla Q3 Preview: Can Record Deliveries Boost Performance?

Tesla will release its Q3 2025 results after market close on Wednesday, Oct 22.

Tesla's Q3 revenue is expected to be $26.265 billion, adjusted net income will be $1.903 billion, and adjusted EPS will be $0.526, according to Bloomberg's consistent expectations.

Previous Quarter Review

Tesla posted second-quarter earnings that missed analysts' expectations as sales fell for the second straight quarter.

The electric vehicle maker reported adjusted earnings per share of $0.40 on revenue that fell 12% year-over-year to $22.5 billion, below estimates compiled by Visible Alpha.

Tesla reported a 16% decline in automotive revenue as sales fell for a second straight quarter and again trailed analysts’ estimates.

Tesla Profit Rebound Short-Lived With EV Subsidy End

Tesla's 3Q earnings could surpass consensus, driven by record sales as the $7,500 EV subsidies expired in the US. The automaker ran its plants flat out, capitalizing on last-minute buyer demand. Yet we anticipate a decline in US deliveries in subsequent quarters, as consumers front-loaded their purchases.

A partial offset could be the introduction of a new model before year-end. Meanwhile, significant revenue contributions from the Robotaxi are expected to materialize later in the decade.

Will Record Deliveries Enhance Performance

Tesla delivered 497,099 cars (481,166 Model 3/Y and 15,933 other models) worldwide in the third quarter, setting a new record. The figure rose 7.4% from the year-ago quarter, after three consecutive quarters of year-over-year decline. The deliveries also beat our estimate of 435,370 units.

The EV tax credit of $7,500, which expired at the end of September, boosted Tesla’s deliveries in the quarter under review. Many customers are likely to have rushed to purchase vehicles to take advantage of the incentive, fueling demand. It wasn’t just Tesla that benefited from this “pull forward” effect. Other auto giants also logged record EV sales for the three months ending September. While Tesla doesn’t officially break down sales by region, the third-quarter jump is likely to have come from the United States. In Europe, however, the company has been facing weakening demand amid intensifying competition from both legacy automakers and Chinese EV players, alongside a backlash tied to Elon Musk’s political activities. 

We expect revenues from automotive sales to decline 5.8% in the to-be-reported quarter. Gross margins from automotive sales are expected at 16%, down 4 percentage points from the year-ago period.

Tesla is set to benefit from increasing energy generation and storage revenues, thanks to the positive reception of Megapack and Powerwall products. In the third quarter of 2025, Tesla deployed 12.5 GWh of energy storage, reflecting an increase from 6.9 GWh in the corresponding quarter of 2024 and setting a new record. We expect revenues from the Energy Generation/Storage segment to be $2.93 billion, suggesting an uptick on both a sequential and a year-over-year basis. Our estimate for the Services/Other unit is pegged at $3.35 billion, implying 20.2% year-over-year growth.

Analysts’ Opinions

Evercore ISI Group raised Tesla price target from $235 to $300. Evercore ISI Group analyst Chris McNally maintained an In-Line rating.

Tesla received a new Buy rating from Melius Research on Monday, with analyst firm setting a $520 price target for the electric vehicle maker. The target sits well above the current stock price of $425.46, though InvestingPro analysis suggests the stock is trading above its Fair Value.

BNP Paribas Exane initiated coverage on Tesla with an Underperform rating and a price target of $307.00, representing approximately 30% downside from current levels. The stock, currently trading at high multiples with a P/E ratio of 258.59, appears overvalued according to InvestingPro’s Fair Value analysis.

Morgan Stanley has reiterated its Overweight rating and $410.00 price target on Tesla following the electric vehicle maker’s third-quarter delivery results. With a current market capitalization of $1.51 trillion and trading at a P/E ratio of 272, InvestingPro analysis indicates Tesla is currently trading above its Fair Value.