Tesla's Q3 Energy-Segment Revenue Misses Estimates By A Mile

Tesla aims to produce 5 million vehicles annually by 2030, nearly tripling current output. CEO Elon Musk outlined this goal during the Q3 earnings call, despite a 43% decline in quarterly net income to $787 million. The company plans $20 billion in capital expenditure by 2026 for expansion, with production capacity cited as a constraint.

Elon Musk has backed a potential merger between Tesla and SpaceX, with a combined market value estimated at £2.7 trillion. Both companies are reviewing the proposal, but no deal has been agreed. Musk faces hurdles, including Tesla's 50% shareholder approval requirement. No share-exchange ratio or timetable has been announced.

Meta reported Q3 revenue of $64.6B (+26% Y/Y) and adjusted EPS of $7.40, beating estimates. Shares fell 7% due to rising AI spending and negative free cash flow. Muse, Meta's AI assistant, has 10M users, with 25% daily retention. Meta raised FY26 CapEx guidance to $135-145B. The company faces legal risks and plans a 2-for-1 stock split in 2027. Management guided Q4 revenue to $73-76B, above consensus.

Tesla (TSLA) and Nvidia (NVDA) will invest $2.8B in Samsung Electro-Mechanics to expand production of advanced semiconductor substrates for AI chips, addressing a supply bottleneck. Nvidia will contribute $2.6B, and Tesla will invest $1.1B. These substrates are crucial for connecting AI processors to circuit boards, and their production is becoming increasingly challenging as AI systems grow in complexity.

Tesla's CFO reported that tariff refunds received in Q3 2026 were reinvested to expand U.S. production capacity, lifting the energy business gross margin to 33.1% from 20.4%. The refunds, along with warranty adjustments, drove the margin increase, but no specific refund amount was disclosed. The funds are being used for various hardware projects, including robotaxi, Optimus, solar, AI, and semiconductor manufacturing.

Tesla's Q3 earnings showed a 56% drop in operating profit, with $28.046B in revenue. Automotive gross margin improved to 18.5%, but expenses rose 39%, driven by AI and R&D spending. FSD users grew 67% YoY to 1.74M. Robotaxi logged 2M unsupervised miles, and Optimus production began. Tesla's market value dropped $68B post-earnings.