Tesla reported a 12% year-over-year increase in third-quarter revenue, marking a rebound after two consecutive quarters of decline. Total revenue reached $28.3 billion, up from $25.18 billion in the same period last year. Automotive revenue rose 6% to $21.2 billion, driven by strong production and a record 497,099 vehicle deliveries, though total production was 447,450 units. Despite the revenue growth, net income fell 37% to $1.37 billion, or 39 cents per share, down from $2.17 billion, or 62 cents per share, a year earlier. The drop was attributed to lower electric vehicle prices and a 50% increase in operating expenses, which the company said were largely due to investments in artificial intelligence and other R&D initiatives. The quarter coincided with the expiration of the U.S. federal electric vehicle tax credit, which had been extended under the previous administration. The end of the credit led to a sales surge in the final months of the quarter as consumers rushed to claim the incentive before it expired. This front-loaded demand may have contributed to a slowdown in future sales, and Tesla’s broader sales performance remains under pressure, particularly in Europe, where the company faces growing competition from Volkswagen, BYD, and other EV makers, as well as declining consumer sentiment linked to Elon Musk’s public statements. Revenue from automotive regulatory credits, a key source of income in past years, fell 44% to $417 million, down from $739 million, reflecting a shift in the regulatory environment and reduced incentives. For the year-to-date, Tesla’s vehicle deliveries are down about 6% compared to the same period in 2024, despite the record quarterly number. Tesla’s energy generation and storage segment emerged as the standout performer, with revenue jumping 44% to $3.42 billion. This growth was fueled by strong demand for its Megapack battery systems and solar products, which are increasingly used to power data centers and commercial facilities. Notably, Musk’s AI startup xAI has been a major customer, spending $198.3 million in 2024 and $36.9 million through February 2025 on Tesla’s energy products, primarily Megapacks. Tesla also made progress on its long-term vision, expanding its Robotaxi service in Austin and launching a ride-hailing pilot in the Bay Area, both with safety drivers. The company said it is gathering data to support a future “universal model” for autonomous driving and is building first-generation production lines for its Optimus humanoid robot. The company reiterated its goal to begin volume production of the Cybercab, the heavy-duty electric Semi, and the new Megapack 3 in 2026, though it did not provide specific volume targets. Despite the revenue beat, Tesla’s stock declined about 2% in after-hours trading, as investors reacted to the lower-than-expected earnings and the lack of clear guidance on future demand. The company cited ongoing uncertainty from shifting global trade policies, tariffs, and supply chain disruptions as reasons for not providing specific delivery or production forecasts. While Tesla’s stock is up nearly 9% in 2025, it still lags behind major market indexes and its megacap peers. The company will host an analyst call later in the day to discuss the results in more detail.