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Tesla Beats Q3 Estimates, Cuts 2026 Spending Forecast to $20 Billion

Tesla posted Q3 2026 revenue of $28.05 billion and adjusted EPS of 48 cents, both above estimates, and lowered its 2026 capital spending forecast to about $20 billion.

Oct 22, 2026 - 07:19

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Tesla Inc. (Nasdaq: TSLA) reported third-quarter results after the market close on Wednesday, October 21, 2026, that topped Wall Street's revenue and profit estimates, and said it now expects to spend about $20 billion on capital projects this year, down from a previous forecast of more than $25 billion. The shares reversed early after-hours gains to trade about 2% lower, Reuters reported.

Results against expectations

Total revenue for the quarter ended September 30 was $28.05 billion, essentially flat compared with $28.10 billion a year earlier, according to Tesla's quarterly update filed with the SEC. Analysts polled by LSEG had expected $27.88 billion, CNBC reported. Adjusted earnings were 48 cents a share, compared with the LSEG consensus of 43 cents, and down from 50 cents in the third quarter of 2025.

On a GAAP basis, net income attributable to common stockholders fell 43% to $787 million, or 22 cents a share, from $1.37 billion, or 39 cents a share, a year earlier, the company's figures show. Operating income dropped to $718 million from $1.62 billion as operating expenses rose to $4.78 billion from $3.43 billion. Total gross profit increased to $5.49 billion from $5.05 billion.

Autos, energy and services

Automotive revenue declined 3% to $20.56 billion. CNBC reported that Tesla attributed weaker automotive results to lower average selling prices and difficulty securing enough battery supply to meet its order backlog. Revenue from energy generation and storage fell to $2.88 billion from $3.42 billion, even as storage deployments rose to 13.7 gigawatt-hours from 12.5 gigawatt-hours. Services and other revenue climbed to $4.61 billion from $3.48 billion.

Tesla delivered 486,532 vehicles in the quarter, 2% fewer than a year earlier, and produced 464,391 vehicles in total, up 4%. The company said it ended the period with the largest backlog for its passenger vehicles in four years. Active subscriptions to its FSD (Supervised) driver-assistance software reached 1.74 million, up from 1.04 million a year earlier. Reuters reported that automotive gross margin excluding regulatory credits was 18.1%, above the 16.7% expected by analysts according to Visible Alpha.

Cash flow and spending

Capital expenditures were $4.73 billion, roughly double the $2.25 billion spent a year earlier but below the $7.5 billion analysts had expected according to LSEG data cited by Reuters. Operating cash flow of $6.26 billion produced free cash flow of $1.53 billion, compared with $3.99 billion a year earlier and with analyst expectations of a $4.92 billion cash burn, Reuters said. Cash, cash equivalents and short-term investments totaled $45.45 billion at the end of September.

The company did not specify which projects would see lower spending under the reduced 2026 forecast, according to Reuters. Tesla said it is aiming to produce about 5 million vehicles a year by around 2030, compared with about 2.5 million expected this year.

Merger question and robotaxi plans

The report came a day after Chief Executive Elon Musk said on SpaceX's earnings call that the boards of both companies had formed special committees to discuss a possible combination. On Tesla's call, Musk said he had nothing to add. "I think I said everything that should be said yesterday," he said, according to CNBC.

Musk said Tesla's driverless robotaxi fleet would begin contributing to financial results in 2027, CNBC reported, and Ashok Elluswamy, Tesla's vice president of Autopilot, said the company plans to give some customer cars access to its FSD (Unsupervised) software around the second quarter of next year. Tesla shares had fallen about 14% this year before the report, according to Reuters.