Tesla Profits Tank Despite EV Sales Surge, Tax Credit Rush

Tesla's latest earnings report reveals a complicated picture for the electric vehicle giant: record-breaking vehicle sales, but profits tumbling 37%. The company's third-quarter net income landed at $1.4 billion, down from $2.2 billion, despite a rush of buyers trying to secure expiring US tax credits for electric vehicles, reports the Guardian. Revenue of $26.5 billion, however, edged past Wall Street forecasts. Earnings per share came in at $0.50, missing analysts' estimates by 4 cents.

The profit slump comes as Tesla faces growing competition, the loss of key tax incentives, and what some see as erratic leadership from CEO Elon Musk. The company continues to tout its ambitions in artificial intelligence and robotics, with Musk making bold claims about Tesla's Optimus robots and self-driving tech, suggesting these could one day eliminate poverty, or at least make up a significant chunk of Tesla's future business.

Meanwhile, Musk is seeking shareholder approval for a staggering $1 trillion pay package, a proposal that two proxy advisory firms have recommended voting down. Musk has lashed out at those critics, accusing them of "corporate terrorism" and hinting he might leave Tesla if his compensation plan, which would help him secure control of the company, is rejected. "My fundamental concern with how much voting control I have at Tesla is, if I build this enormous robot army, can I just be ousted in the future?" he said to investors on Wednesday, per the Wall Street Journal. "I don't feel comfortable building that robot army if I don't have, at least, influence over it."

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Shareholders will vote on that pay package on Nov. 6. Despite the drama, Tesla's stock has rebounded over the last six months, fueled in part by hype around future products like robotaxis and a new, less-expensive Model Y sedan, per the Guardian. However, analysts have questioned the sedan's pricing, especially against cheaper Chinese rivals, and the much-hyped Cybertruck has yet to move the sales needle. Yahoo Finance reports that Tesla's stock was down 3% in premarket trading on Thursday.