Tesla profits drop but top analyst estimates

Tesla's third-quarter profits dropped by 42.7 percent, falling to US$787 million, amid heavy investments in new technologies. Despite a 42.7 percent decline in earnings, the company surpassed analyst expectations, driven by strong sales in Europe during the period. However, Tesla experienced a notable decline in revenues from regulatory credits, energy, and storage segments, while research and development expenses surged.

The company maintained a flat revenue stream of US$28 billion during the quarter. CEO Elon Musk emphasized continuous investment in future-oriented initiatives, including research and development, capital expenditures, and robotics, referring to the administration's preferred term, "Super Intelligence." The company's outlook remains optimistic, with Musk expressing confidence in the future.

Musk announced plans for a potential merger between Tesla and SpaceX, involving special committees of independent directors at both companies to discuss the merger's terms. While third-quarter auto sales exceeded estimates, Tesla's bottom line did not improve due to the substantial increase in capital spending, which nearly doubled to US$4.7 billion.

The company has been under scrutiny for the slow rollout of its robotaxi venture, with only around 800 robotaxis currently operating in Texas. Despite these challenges, Tesla's post-earnings trading saw a 1.4 percent increase in share price.