Tesla profits drop 43% in Q3

Tesla's financials for Q3 2026 reveal a significant decline, with profits dropping 43% year over year. Revenues remained stable at $28 billion, mirroring the figures from the same period last year. However, the breakdown of this revenue shows a troubling trend. Automotive sales, which accounted for $20.6 billion, experienced a modest 3% decrease compared to 2025.

More concerning is the decline in revenue from solar panels and storage batteries, a sector that had been growing. This line of business saw a 16% decrease in revenue for Q3, dropping to $2.9 billion. Services and other revenue streams, including parts sales and Supercharger usage, grew by a third to $4.6 billion. Despite this positive shift, Tesla's operating expenses increased by a substantial 39% to $4.8 billion, which has severely impacted the company's operating margin.

The margin fell to just 2.6% in Q3 2026, down from 5.8% in the same quarter of the previous year. As a result, Tesla's net profit fell to $787 million, a sharp decline of 43% compared to the previous year. Additionally, capital expenditures rose by an alarming 110% to $4.7 billion, further straining the company's financial health. Moreover, free cash flow took a significant hit, falling by 62% to $1.5 billion.