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NEW YORK (AP) — Tesla said Wednesday that it sold more vehicles in the past three months after boycotts against CEO Elon Musk hit hard earlier this year, but profits still fell sharply. Third-quarter earnings at Tesla fell to $1.4 billion, or 39 cents a share, from $2.2 billion, or 62 cents a share, a year earlier. That marked the fourth quarter in a row that profit dropped. Excluding certain charges, earnings were 50 cents per share, down from 72 cents per share a year ago and below the 56 cents forecast by Wall Street analysts. Revenue rose to $28.1 billion from $25.2 billion in the June through September period, beating Wall Street’s forecast. Tesla shares fell 3% to $425.90 in after-hours trading The stock slipped as Musk, as he has done for most of the year, sought to shift investor attention away from selling cars to other businesses: its driverless robotaxi service, its AI product and its Optimus robots for the home and factories. “It’ll seem so real, that you’ll need to poke it,” he said of the Optimus, predicting it will likely become "the biggest product of all time.” Musk also said he was confident enough in the robotaxi to remove “safety monitors” from the driver's seat by the end of the year in its first market, Austin, Texas. He added that the service, which is also available in San Francisco, will roll out to as many as 10 other metro areas also by the end of the year. Tesla's third-quarter sales were boosted by customers rushing to take advantage of a $7,500 federal tax credit for EV purchases before it expired on Oct. 1, possibly stealing sales from the current quarter. Financial analysts had been upping their estimates of revenue since Musk announced earlier this month that sales of electric vehicles, one part of the multipronged business, rose 7% in the quarter after plunging for most of the year. Tesla was also helped by surging sales from its separate battery storage and electric charging businesses, but the EVs still make up much of the overall revenue figures. “It's a positive that they are increasingly diversifying from the auto business, but our primary concern is demand for EVs,” said Garrett Nelson, an analyst at CFRA Research who has a “sell” rating on the stock. “There’s a lot of uncertainty.” A much watched measure, gross margins, hit 18%, the highest for this year but still down from the third quarter a year ago. The figure, which shows how much money Tesla makes after paying staff, raw materials and other basic expenses, are also down from 25% four years ago as the company offers discounts and other incentives to fight back against rival EV makers that have been stealing market share. Musk was predicting 20% to 30% sales growth for 2025 at this time last year, but it hasn't turned out that way. In addition to alienating potential customers with his embrace of right-wing politicians, sparking boycotts in key markets in the U.S. and abroad, he also has failed to shake up his vehicle lineup with a new, exciting model or introduce a substantially cheaper car to appeal to more buyers. When he finally did reveal two cheaper offerings earlier this month — stripped down versions of the Model Y and Model X — investors were unimpressed because the discount didn’t seem deep enough. They both cost slightly less than $40,000, much higher than expected. One Musk watcher on Wall Street was undeterred by the quarterly report. “It’s nice to have revenue come back,” said Brian Mulberry, a senior client portfolio manager at Zacks Investment Management. “There is still strong demand for Teslas.”
