23rd October 2025 – (New York) Tesla has announced record quarterly revenue of $28 billion, a 12% year-on-year increase for the period ending in September, driven by a surge of American buyers seeking to secure federal electric vehicle tax credits before their expiration. Despite this income milestone, the company concurrently witnessed a 37% contraction in its profits during the same timeframe.
This financial outcome emerges ahead of a November shareholder ballot concerning a new compensation arrangement for Chief Executive Elon Musk, a package with a potential valuation reaching $1 trillion. Following the earnings disclosure, Tesla’s shares declined by approximately 3.8% in after-hours trading.
The profit downturn is attributed to several factors, including substantial expenditures on research and development, particularly in artificial intelligence and robotics. Furthermore, tariffs on imported components and raw materials imposed an additional financial burden, costing the firm more than $400 million in the quarter according to Tesla’s finance chief, Vaibhav Taneja, who indicated such research spending is anticipated to continue its ascent.
Intensifying global competition, especially from Chinese manufacturers like BYD, also pressures the automotive giant. While Tesla reversed a previous trend of declining quarterly sales, rivals including Ford and Hyundai demonstrated even more robust growth in the US market during the same period.
In a strategic move to stimulate demand after the federal incentives lapsed, the company introduced more affordable versions of its Model Y and Model 3 vehicles in October, priced roughly $5,000 lower. The quarter also saw the successful launch of a six-seat variant of the Model Y in China, alongside buyer enticements such as five-year, interest-free loans and insurance subsidies.
