Tesla (TSLA) shares closed the third quarter with strong performance, leaving behind the losses of 2025. Investor confidence in the company's artificial intelligence (AI) goals, the increase in sales, and the reconciliation between CEO Elon Musk and his old friend President Trump contributed to this surge. However, it remains uncertain how long Tesla's high valuation will continue.
Tesla's Q3 earnings report will be announced after the market closes on Wednesday. While the S&P 500 and Nasdaq are on the verge of reaching new highs, the broader market seems to have moved past Trump's unpredictable tariff wars. However, fears of an expected economic slowdown in the U.S. persist. Additionally, a 25% tariff on imported cars and parts continues to be imposed, negatively affecting domestic car manufacturers.
Tesla's notable points include the expiration of federal electric vehicle (EV) tax incentives and the company's robotaxi goals.
According to Bloomberg estimates, Tesla's third-quarter revenue is expected to be 26.27 billion dollars. This represents a 4% increase compared to last year's 25.18 billion dollars. In terms of profitability, a adjusted earnings per share (EPS) of 0.53 dollars is anticipated, equivalent to 3.78 billion dollars in EBITDA.
This significant revenue projection comes after the automaker reported a record sales quarter. Tesla noted that its third-quarter deliveries were 497,099 units. This number easily surpassed the approximately 439,800 units of Bloomberg consensus estimates and last year's 462,890 units, marking the highest quarterly sales figure in its history. The company also launched a 12.5 gigawatt-hour energy storage product.
Despite this sales boom, it took place before the expiration of U.S. federal electric vehicle tax incentives on September 30. Elon Musk warned after the second-quarter earnings that the company might face a tough period following the expiration of electric vehicle tax incentives.
In order to ensure economic accessibility, Tesla introduced a 'Standard' version of the Model Y and Model 3 sedan with lower specifications in October. Both models feature rear-wheel drive, smaller batteries, and less powerful motors. Their prices are set at 39,990 dollars and 36,990 dollars, respectively.
Tesla's next steps in its Robotaxi strategy are crucial. The company began its first Robotaxi test in Austin, Texas during the summer and expanded the service area within weeks. However, there is still a safety driver present in each Robotaxi. The company is trying out a ride-hailing service in the San Francisco Bay Area, but these vehicles are still human-driven. Comments and tests from Tesla have raised concerns among local authorities in California.
Reports suggest that Tesla may also begin Robotaxi testing in Nevada and Arizona, but no official announcement has been made yet.
Wedbush analyst Dan Ives stated that he believes the most important part of Tesla's growth story has now begun. Ives, who emphasized that the company is highlighting autonomous and robotic technologies at this stage, said, “We believe the autonomous valuation alone represents 1 trillion dollars for the Tesla story.”
Ives, one of Wall Street's biggest Tesla supporters, set a price target of 600 dollars for the stock.
Barclays analyst Dan Levy noted that Robotaxis are “the most central elements” in Tesla's bullish scenario. However, the silence surrounding news related to Robotaxi and autonomous developments is notable. Levy emphasized that investors are curious about when the safety driver in the Austin test will be deactivated.
A Tesla investor, Nancy Tengler, expects Musk to approve the 1 trillion dollar compensation package at the shareholder meeting scheduled for November 6. The current compensation package is subject to a lawsuit in Delaware. Shareholders claim they have not received enough information to adequately question this compensation approved by the board and a court judge has supported this situation.
Musk's new compensation package is also facing criticism. Independent proxy advisory firms Glass Lewis and ISS have recommended that shareholders reject Musk's latest proposed compensation package.
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