Tesla's Quarterly Profit Drops by 37% Due to Rising Costs

Tesla has reported a net profit of $1.373 billion (£1.182 billion) for the third quarter of the year, marking a 37% decline compared to the same period last year, as announced by the company on Wednesday after the US stock market closed. The primary reason for this significant reduction has been the narrower margins in the multinational's automotive sales, as it had to adjust prices to maintain demand.

In fact, the company's sales have increased by 12% year-on-year, reaching a revenue of $28.095 billion (£24.189 billion). Meanwhile, operating costs rose by 50%, amounting to $3.430 billion (£2.953 billion). This increase in revenue is attributed to a rise in vehicle deliveries and growth in areas such as energy generation and storage or services.

"We believe that our scale and cost structure will allow us to navigate the changing market dynamics worldwide more effectively than our competitors, with AI advancements making our products the most attractive in the market," Tesla stated.

The adjusted gross operating profit (EBITDA) stood at $4.227 billion (£3.639 billion), translating to a 9% drop compared to the period between July and September 2024. The EBITDA margin was 15%. Meanwhile, the operating result decreased by 40% year-on-year to $1.600 billion (£1.378 billion), with an operating margin of 5.8%.

Looking towards the end of the year, Tesla finds it "difficult" to gauge the impact of changes in global trade and fiscal policies on automotive and energy supply chains, its cost structure, and the demand for durable goods and related services.

"While we are making prudent investments that will prepare our vehicle, energy, and other future businesses for growth, actual results will depend on various factors, such as the overall macroeconomic environment, the pace of acceleration of our autonomy efforts, and the increase in production at our factories," it argued.