The company sold more cars but made less money on each one because of discounts and low-interest loans.

Oct. 22, 2025Updated 4:48 p.m. ET
Tesla said Wednesday that its profit sank in the third quarter after it cut car prices to lift sales and earned less money from selling clean-air credits.
Profit fell 37 percent, to $1.4 billion from a year earlier, the company said. Revenue rose 12 percent, to $28.1 billion.
Tesla sold more cars from July through September than it did in the third quarter of 2024, but earned less money per car because it cut prices and offered low-interest loans for its most popular models.
The company reduced prices further this month, offering stripped-down versions of its Model 3 sedan and Model Y sport utility vehicle for around $5,000 less than the previous lowest-cost versions of those cars.
Tariffs also cut into profit, Tesla said. The company makes all the cars it sells in the United States in California and Texas, but must pay tariffs on imported raw materials and components.
The company declined to issue a forecast for sales and profit, saying, “It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure and demand for durable goods and related services.”
The earnings report was the last before Tesla shareholders vote on whether to approve a proposed pay package for Elon Musk, the chief executive. The plan would grant him shares that would be worth $1 trillion if he meets a series of profit, sales and stock valuation targets.
Analysts had expected Tesla to present the most positive quarterly report possible in view of the upcoming vote. Tesla will hold its annual meeting on Nov. 6.
For Mr. Musk’s admirers, sales and profit are no longer the most important measures of Tesla’s success. They value the company based on expectations for future businesses, primarily self-driving taxis and humanoid robots.
Tesla car sales are important, some analysts say, primarily because they can be equipped with self-driving software for which owners will pay extra. Data collected by the cameras installed in the vehicles will be used to train artificial intelligence and eventually allow cars to drive without human intervention. Currently Tesla drivers are supposed to intervene if the software makes a mistake.
“Every new car sold feeds that machine,” Shay Boloor, chief market strategist at Futurum Equities, said in a note ahead of the earnings release.
Skeptics say that Tesla’s share price is way too high when measured against its earnings. The company’s quarterly profit was slightly higher than General Motors earnings of $1.3 billion for the same quarter. Yet Wall Street values Tesla at more than $1.4 trillion and G.M. at $64 billion. The share price closed about 1 percent down on Wednesday.
Tesla sales in the third quarter were bolstered by a surge of Americans taking advantage of a federal tax credit on electric vehicles that expired at the end of September. Most analysts expect sales to slump in coming months.
The company also earned less money from clean-air credits that other carmakers had to buy to comply with environmental rules. Revenue from that source fell 44 percent, to $417 million during the quarter, Tesla said.
President Trump and Republicans in Congress gutted clean-air rules, freeing established carmakers from paying Tesla for credits, which had often accounted for a large share of the company’s profit.
Tesla’s share of the market for electric vehicles has continued to decline as Chinese, American and European carmakers offer more models that have comparable technology and often sell for less. Tesla’s share in the United States was 41 percent in the third quarter, down from 48 percent a year earlier, according to Cox Automotive.
One bright spot for Tesla was the market for large batteries used to store renewable energy. Sales of those products rose 44 percent, to $3.4 billion.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.