Tesla reported a mixed bag of results in its Q3 earnings.
Profits and adjusted earnings per share both missed Wall Street expectations. Tesla’s third-quarter revenue, however, reached an all-time high and exceeded forecasts after it delivered a record number of vehicles in the quarter.
The EV maker used Wednesday’s call to discuss Tesla’s future direction, the Optimus launch, and CEO Elon Musk’s $1 trillion pay package.
Tesla shares sank following the missed profits, and during the earnings call, the shares declined further by around 4.5% in after-hours trading.
Here are the five biggest takeaways from Tesla’s call:
1. A focus on autonomy
Musk kicked off the call, reiterating his clear goal for Tesla: full autonomous driving.
“We’re at a critical inflection point for Tesla and our strategy going forward as we bring AI into the real world,” said Musk during his opening remarks. “I think it’s important to emphasize that Tesla really is the leader in real-world AI.”
The CEO said that FSD and robotaxis will change the transportation sector and that he is “100% confident” that the company can solve unsupervised full self-driving at a “safety level far greater than a human.”
Musk added that there are billions of Tesla cars that are capable of becoming fully self-driving vehicles with a software update, and that he plans to expand production as fast as the company “reasonably can.”
Musk estimates that he expects robotaxis in a large part of Austin to be free of safety drivers by the end of the year, as well as for robotaxis to be operating in “eight to ten metro locations” by the end of the year, including in Nevada, Florida, and Arizona.
2. Addressing the pay package
Tesla CFO Vaibhav Taneja closed the earnings call by urging shareholders to vote for Musk’s proposed $1 trillion pay package.
Musk also addressed those who question his compensation with some harsh words.
Toward the end of Wednesday’s call, Musk described two major proxy firms critical of his proposed Tesla pay package, ISS and Glass Lewis, as “corporate terrorists.”
“They have made many terrible recommendations in the past that, if those recommendations had been followed, would have been extremely destructive to the future of the company,” Musk says.
Musk’s 2018 compensation package of $55 billion was struck down by a Delaware judge in 2024. In September, the Tesla board proposed an up to $1 trillion package for Musk. To get that compensaton, Musk needs to hit specfic milestones over a 10 year period, including car, robotaxi, and robot delivery goals.
Shareholders are set to vote on the new compensation package at a meeting on November 6.
3. Musk teases Optimus V3
Musk said the company aims to debut a prototype of the latest iteration of Optimus in February or March of 2026.
“It won’t even seem like a robot; it will seem like a person in a robot suit,” he said.
It turns out, however, that building a humanoid robot at scale in order to unlock the global economy is no easy feat.
Musk said Tesla is working through technical and logistical challenges of Optimus that keep the engineers stuck in hourslong meetings on Fridays and Saturdays.
Creating a human-like robotic hand is a “difficult engineering challenge,” Musk said during the call.
Given that humanoid robots are also a nascent industry, the CEO added that getting to volume production will be a hurdle in itself.
“So with cars, you’ve got an existing supply chain,” he said. “With computers you’ve got an existing supply chain. With a humanoid robot, there is no supply chain.”
The CEO said Tesla plans to build a production line with the capacity to build a million units of Optimus robots by the end of 2026.
4. A new chip deal with Samsung
Tesla is using its dual partnership with Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) to build the next generation AI5 self-driving computer chips.
In July, Musk unveiled a $16.5 billion deal with Samsung, using the South Korean company’s new manufacturing plant being built in Taylor, Texas.
TSMC, a yearslong partner with Tesla, will also contribute to the chip production through its plant in Arizona, Musk said during the call.
“Our goal, explicit goal, is to have an oversupply of AI5 chips,” he said.
The CEO said the AI5 chip will be 40 times better than the AI4 chip because Tesla maintains close control of the hardware and software stack.
5. Addressing tariff impacts
Tariffs continue to be a concern for Tesla, especially for its energy storage business.
“The other thing to keep in mind is we are seeing headwinds in this business, given the increase in competition and tariffs, the total tariff impacts for Q3 for both businesses were in excess of $400 million, generally split evenly between them, services and other demonstrated a marked improvement sequentially,” Taneja, Tesla’s CFO, said during the earnings call.
In Wednesday’s earnings release, Tesla said that it faces “near-term uncertainty from shifting trade, tariff, and fiscal policy.”
Even though Tesla’s factory in Shanghai is able to offset some tariffs by supplying countries outside the US, Tesla said in the report that its operating income decreased 40% year over year, due to multiple factors, including a higher average cost per vehicle, which is partially because of an increase in tariffs.
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