Q3 2026 · the quarter TSLA reports
Sales
PricedIn$28.8B$27.3B – $30.3B
$27.3B$28.8B$30.3B
adjusted EPS
PricedIn$0.44$0.28 – $0.61
$0.28$0.44$0.61
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
The models agree closely on sales, $28.6B to $29.1B, since deliveries are known. Muse Wonder is lowest, with sales 'anchored near the second quarter level', yet highest on earnings at $0.54, assuming 'a modest recovery' in car margin and a 3.0% operating margin. Sol is highest on sales, adding '$4.9 billion of services'. Sol's earnings range is widest, $0.20 to $0.68: its low 'allows heavier expenses without matching sales'; its high lets 'profits outgrow sales'.
The models expect third-quarter sales near $28.8B, close to the second quarter, because the deliveries Tesla already reported were nearly flat.
Sales$28.8B$27.3B – $30.3B · +2% on Q3 2025 ($28.1B)
Adjusted EPS$0.44$0.28 – $0.61 · −11% on Q3 2025 ($0.50)
Investment and cash generation
Base case
Capital spending$7.97B
Free cash flow−$3.18B
Free cash flow: operating cash flow less capital spending.
Tesla's sales jumped in the second quarter to $28.2B, but gross margin fell to 16.8% and adjusted earnings to $0.33 a share. One-time benefits from the first quarter did not repeat and spending on new products climbed. Operating margin dropped to 1.4%, and free cash flow turned to −$1.1B as capital spending reached $5.8B.
The third quarter's volume is already public: over 486,000 cars delivered and 13.7 GWh of storage deployed, each a little above the second quarter. Production ran below deliveries, so cars came out of inventory. All six models build sales from these counts at prices close to the second quarter's, landing between $28.6B and $29.1B.
Management says demand is not the limit. Tesla left the second quarter with its largest order backlog since 2023, and battery packs and electronic parts cap production. It also warned that research costs keep rising, that loan subsidies cost more as interest rates rise, and that capital spending will top $25B this year.
The models put adjusted earnings near $0.44 a share, up from $0.33. The car margin holds near the second quarter's underlying level and energy margins recover from a warranty charge. Operating margin stays thin, about 1.7%, and capital spending near $8.0B leaves free cash flow around −$3.2B.
Because volume is known, the models barely differ on sales. They differ more on earnings: Muse Wonder sees $0.54 on a fuller margin recovery, while Opus and Grok see $0.40, with Opus carrying a currency loss and a car margin near 16%.
Earnings per share come from a gross margin near 17% on about $28.8B of sales, less fast-rising research costs, with stock pay added back. Currency losses stay in adjusted earnings, so a stronger yuan weighs on the figure.
Sales by quarter
Q1 2025$19.3B−9%
Q2 2025$22.5B−12%
Q3 2025$28.1B+12%
Q4 2025$24.9B−3%
Q1 2026$22.4B+16%
Q2 2026$28.2B+26%
Q3 2026$28.8B+2%
Each percent is on the same quarter a year earlier. The last row is the models' forecast.
The quarter forecast, line by line
The lines as the company's statement shows them. The forecast columns are the average of the models, line by line. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter worked out from the averaged lines with the company's adjustments.
Car margin excluding credits, by quarter
Q2-202515%
Q3-202515.4%
Q4-202517.9%
Q1-202619.2%
Q2-202616.3%
Where each number comes from
- Q2-2025
Automotive gross margin excluding regulatory credit sales (non-GAAP) 15.0% 15.4% 17.9% 19.2% 16.3%
- Q3-2025
Automotive gross margin excluding regulatory credit sales (non-GAAP) 15.0% 15.4% 17.9% 19.2% 16.3%
- Q4-2025
Automotive gross margin excluding regulatory credit sales (non-GAAP) 15.0% 15.4% 17.9% 19.2% 16.3%
- Q1-2026
Automotive gross margin excluding regulatory credit sales (non-GAAP) 15.0% 15.4% 17.9% 19.2% 16.3%
- Q2-2026
Automotive gross margin excluding regulatory credit sales (non-GAAP) 15.0% 15.4% 17.9% 19.2% 16.3%
From the second quarter of 2025 to the second of 2026. The first-quarter peak included one-time benefits; the models hold the third quarter near 16%.
What it rests on
- Third-quarter volume
- Over 486,000 cars delivered, over 464,000 built, 13.7 GWh of storage deployed
In the third quarter, we produced over 464,000 vehicles, delivered over 486,000 vehicles and deployed 13.7 GWh of energy storage products.
Tesla's third-quarter delivery release - Car margin excluding credits
- Fell from 19.2% to 16.3% in the second quarter
Automotive margins, excluding regulatory credits, declined sequentially from 19.2% to 16.3%.
Second-quarter 2026 earnings call - Order backlog
- Largest since 2023; supply chain limits production
We exited Q2 with our largest order backlog since 2023. We are therefore focused on increasing production at all our factories to meet this growing demand. Production growth will be limited by our supply chain.
Second-quarter 2026 earnings call - Currency loss
- About $300 million lost on currency in the second quarter
Net income was positively impacted by a mark-to-market gain of $1 billion on our SpaceX holdings, which was offset by losses on FX of approximately $300 million and on Bitcoin of about $100 million.
Second-quarter 2026 earnings call - Operating costs
- Expected to keep growing in 2026 and beyond, led by research
Note that we are in a big investment cycle and expect our operating expenses, largely driven by R&D, to continue to grow in 2026 and beyond.
Second-quarter 2026 earnings call
Low and high
Basethe middle forecast
Key assumptions
Deliveries of about 486,000 sell at prices close to the second quarter's. Third-quarter volume is already reported, so sales rest on price per car and storage pricing.6 of 6
- Opus 5.5With a similar price per car (about $42,500 per car sold, after leases)
- GPT-6.1 SolVehicle revenue per non-leased delivery stays close to the second quarter
- Grok 4.7the sales middle is built from about 487,000 deliveries and 13.7 gigawatt-hours of storage rather than from a guess
- GLM 5.3lock in most of the quarter's revenue
- Gemini 4 ArgonThese actual third quarter volume figures directly anchored our third quarter 2026 revenue forecast
- Muse Wonderthird quarter sales are anchored near the second quarter level rather than guessed from production alone
Car margin excluding credits stays near 16%, the second quarter's underlying level. First-quarter one-time warranty and tariff benefits did not repeat, and loan subsidies cost more as rates rise.4 of 6
- Opus 5.5The third-quarter car margin excluding credits (I assume about 16%)
- GLM 5.3I set Q3 auto margin near 16.5%
- Grok 4.7The base case holds the second half near that underlying rate
- Muse WonderI assume only a modest recovery
Energy margin recovers to roughly 23% to 25% after the second quarter's warranty charge. Management expects energy margins to settle in the low to mid 20% range.4 of 6
- GPT-6.1 SolI assume roughly 25% in the third quarter
- GLM 5.3energy margin near 25%
- Grok 4.7The base case uses about 23 percent in the second half of 2026
- Muse WonderManagement guides to low to mid twenties longer term, so I use that range
Operating costs rise to about $4.45B–$4.7B, keeping operating margin near 1.7%. Management expects research and pre-production costs for new products to keep growing.4 of 6
- GPT-6.1 Soloperating expenses of roughly $4.7 billion, leaving only about a 1.4% operating margin
- Opus 5.5operating costs (I assume about $4.45 billion)
- GLM 5.3quarterly opex near $4.6 billion
- Muse WonderThat keeps operating margin low despite higher sales
Capital spending near $8.0B turns free cash flow to about −$3.2B. Management expects 2026 spending above $25B, rising further in the second half.4 of 6
- Opus 5.5roughly $8 billion in the third quarter
- GPT-6.1 Solcapital spending is $7.8 billion in the third quarter
- Gemini 4 Argonnegative 2.7 billion dollars of free cash flow in the third quarter of 2026
- GLM 5.3deeply negative free cash flow for 2026 through 2028
A currency loss of about $200 million stays inside adjusted earnings. The yuan strengthened again, and the company does not remove currency swings from adjusted earnings.1 of 6
- Opus 5.5I carry a currency loss of about $200 million in the third quarter.
If all of this happens
$28.8Bsales
$0.44adjusted EPS
$7.97BCapital spending
−$3.18BFree cash flow
Cash walk not supplied by every model.
Lowabout 1 chance in 10 of worse
What the low case assumes
Prices per car fall and loan-subsidy costs rise on the deliveries already made. Higher interest rates raise the subsidy cost, which Tesla books against revenue.4 of 6
- GPT-6.1 SolLower vehicle prices and costly financing support
- Grok 4.7Commodity costs and financing subsidies pressure vehicle margins
- Muse Wonderinterest payments to support low-rate loans keep car margins near or below the second quarter level
- Gemini 4 ArgonIntensifying price competition, financing subvention costs
Storage revenue slips on customer timing and falling prices. Energy is lumpy and industrial storage prices are coming down under competition.4 of 6
- Muse WonderEnergy deployments slip on customer timing and competition
- Grok 4.7Energy storage prices fall faster than volume grows
- GPT-6.1 SolStorage price competition or another warranty problem
- Opus 5.5energy storage prices falling under Chinese competition
Car margin excluding credits drops below about 15%, a point or more under the base. Tariffs, metal costs and subsidies squeeze margins that were 16.3% in the second quarter.3 of 6
- Opus 5.5push the car margin toward 15%
- GLM 5.3automotive gross margin excluding regulatory credits below roughly 15%
- Gemini 4 Argonautomotive gross margin excluding regulatory credits falling below 15 percent
Research costs and depreciation run ahead of sales. Management expects operating costs to keep growing through the investment cycle.3 of 6
- GPT-6.1 SolHigh spending without enough operating leverage
- Opus 5.5research costs and depreciation rising faster than sales
- GLM 5.3Research spending and depreciation growing faster than revenue
If all of this happens
$27.3Bsales · −5% vs base
$0.28EPS · −36% vs base
Sales would have to fall to about $27.3B, 5.2% under the base, and adjusted earnings to $0.28 a share, 36% under. On deliveries already counted, that means lower prices per car and costlier loan subsidies, storage projects selling for less or slipping, and a car margin excluding credits falling toward or below 15%, while research spending keeps climbing. Muse Wonder's low is furthest on sales at $26.5B, because it alone has demand softening as 'high interest rates and weaker consumer confidence outweigh high fuel prices', with price cuts on top. Sol's earnings low is furthest at $0.20, because its low 'allows heavier expenses without matching sales', a bigger cost overrun than the others carry.
In the second quarter, with a car margin excluding credits of 16.3%, operating margin was just 1.4% and adjusted earnings $0.33 a share, so a further slip leaves little profit.
The six lows run from $26.5B (Muse Wonder) to $28.0B (GPT-6.1 Sol).
First signIn the third-quarter report: a car margin excluding credits below 15%, or energy margins and storage prices slipping together.
Highabout 1 chance in 10 of better
What the high case assumes
Car margin excluding credits holds near 18%, about two points above the base. Cost cuts would offset metals and financing costs while demand stays strong.2 of 6
- Grok 4.7Vehicle margins stabilize as cost cuts offset metals and financing costs.
- Muse WonderCar and energy margins recover more than expected as costs fall and services and software subscriptions grow fast
Storage deploys strongly with warranty costs under control. Second-quarter energy margin was cut by a one-time warranty charge that need not repeat.2 of 6
- GPT-6.1 SolStrong storage deployment with controlled warranty costs
- Opus 5.5Megapack 3 and data center demand lifting energy
Self-driving subscriptions and services grow faster than expected. Nearly 1.5 million customers pay for self-driving, and services margin hit a record.2 of 6
- Opus 5.5robotaxi and FSD subscription revenue at high margins
- GPT-6.1 SolBroader paid self-driving adoption and autonomous taxi approvals
A tariff refund is kept and lifts earnings. A court ruling may let Tesla recover tariffs, though timing and customer shares are uncertain.1 of 6
- GPT-6.1 SolA realized retained benefit could lift the high earnings case
If all of this happens
$30.3Bsales · +5% vs base
$0.61EPS · +38% vs base
Sales would have to reach about $30.3B, 5.1% above the base, and adjusted earnings $0.61 a share, 38% above. The car margin excluding credits would have to hold near 18% rather than 16%, energy margins would need a full recovery with no new warranty charge, and services and subscriptions would have to grow fast. Grok's sales high is furthest at $30.8B, paired with vehicle margins 'holding near 18 percent'. Muse Wonder's earnings high is furthest at $0.75 because car and energy margins 'recover more than expected as costs fall', starting from the highest base operating margin, 3.0%, against an average of 1.7%.
Gross margin reached 21.1% in the first quarter of 2026, though one-time warranty and tariff benefits helped, so a strong quarter is not without precedent.
The six highs run from $29.8B (GLM 5.3) to $30.8B (Grok 4.7).
First signIn the third-quarter report: a car margin excluding credits near 18%, with services margin holding near its record.
Watch
The third-quarter report is the test. A car margin excluding credits above 16% points higher; below 15% points lower. Watch operating costs against roughly $4.6B, the energy margin against the mid-20s, and any currency loss. Capital spending well above $8.0B would push free cash flow lower.
Q4 2026 · the quarter after
Sales
PricedIn$29.7B$27.0B – $32.5B
$27.0B$29.7B$32.5B
adjusted EPS
PricedIn$0.49$0.27 – $0.71
$0.27$0.49$0.71
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
Five models see sales rising from the third quarter, by 1.7% to 7.6%. Muse Wonder is lowest at $27.0B: 'Deliveries stay close to the record third quarter', with storage 'around thirteen to fourteen gigawatt hours'. Sol is highest at $31.3B, assuming 'roughly 520,000 passenger vehicle deliveries' and '$4.1 billion' of energy. On earnings Grok is lowest at $0.38, fading credits 'toward a small residual', and Muse Wonder highest at $0.56.
The models expect fourth-quarter sales near $29.7B, a modest step up as battery-pack limits let deliveries edge higher.
Sales$29.7B$27.0B – $32.5B · +19% on Q4 2025 ($24.9B)
Adjusted EPS$0.49$0.27 – $0.71 · −2% on Q4 2025 ($0.50)
Investment and cash generation
Capital spending: not supplied by every model
Free cash flow: not supplied by every model
Free cash flow: operating cash flow less capital spending.
The fourth quarter is the first whose volume is not yet known. Last year it went the wrong way: sales dropped 11% from the third quarter after United States buyers rushed ahead of the end of the federal tax credit, and deliveries fell to about 418,000.
This year management describes demand running ahead of supply: the largest order backlog since 2023, with battery packs and electronic parts as the limit. Third-quarter production of about 464,000 ran below deliveries, so cars came out of inventory.
Five models expect a rise: deliveries of about 495,000 to 520,000, more energy revenue as storage projects are recognized, and services near $4.8B. The average lands at $29.7B, 3.1% above the third quarter, with adjusted earnings near $0.49 a share.
Muse Wonder stands apart at $27.0B, 5.6% below the third quarter. Its base keeps deliveries close to the third quarter's record and storage around 13 to 14 gigawatt hours, rather than building on the backlog.
Spending stays heavy. Opus puts fourth-quarter capital spending near $9.5B, and management expects operating costs to keep rising, so earnings stay thin even as sales grow.
Earnings per share depend on whether extra volume and energy revenue outrun rising research costs. The average is $0.49, up 10% on the third quarter; Grok sees $0.38 as credits fade and margins stay flat, Muse Wonder $0.56.
What it rests on
- Quarterly deliveries
- 497,099 in the third quarter of 2025, then 418,227, 358,023 and 480,126
Total deliveries 384,122 497,099 418,227 358,023 480,126 25%
Second-quarter 2026 update - Third-quarter volume
- Over 486,000 delivered; over 464,000 built
In the third quarter, we produced over 464,000 vehicles, delivered over 486,000 vehicles and deployed 13.7 GWh of energy storage products.
Tesla's third-quarter delivery release - Order backlog
- Largest since 2023; supply chain limits production
We exited Q2 with our largest order backlog since 2023. We are therefore focused on increasing production at all our factories to meet this growing demand. Production growth will be limited by our supply chain.
Second-quarter 2026 earnings call - Energy timing
- Storage deployments follow customer timelines and are lumpy
As we have previously noted, energy business is inherently lumpy. Deployments are tied to customer timelines and largely out of our control.
Second-quarter 2026 earnings call - Cybercab
- Launched in September 2026 in the robotaxi fleet
Launch Cybercab in September 2026, deploying fully autonomous vehicles without steering wheels or pedals in our Robotaxi fleet;
2026 proxy statement
Low and high
Basethe middle forecast
Key assumptions
Deliveries rise to about 495,000–520,000, from about 486,000 in the third quarter. The backlog is the largest since 2023, and added battery-pack capacity lets output grow slowly.4 of 6
- Opus 5.5about 510,000 in the fourth quarter
- GPT-6.1 SolMy fourth-quarter middle assumes roughly 520,000 passenger vehicle deliveries
- Grok 4.7a fourth quarter near 495,000
- GLM 5.3This supports my Q4 2026 delivery assumption near 500,000
Services keep growing, near $4.8B, on used cars, repairs and charging. Services revenue rose 50% in the second quarter and its margin hit a record.3 of 6
- Opus 5.5I hold services at about $4.7 billion in the third quarter and $4.8 billion in the fourth
- Grok 4.7The base case keeps services growing with the fleet
- Muse WonderServices reached a record margin and helps offset weaker car and energy margins in the base case
Capital spending stays high, near $9.5B, keeping free cash flow negative. Management expects spending to increase further in the second half of 2026.3 of 6
- Opus 5.5$9.5 billion in the fourth
- GPT-6.1 Sol$25.5 billion for 2026
- Gemini 4 Argonnegative 6.0 billion dollars for full year 2026
Regulatory credit sales stay near their low second-quarter level. Credit revenue fell 67% after United States programs were restricted.3 of 6
- GPT-6.1 SolRegulatory credit sales are only $150 million in each forecast quarter
- Grok 4.7The base case fades credits toward a small residual by 2027
- Opus 5.5I hold it near $150 million a quarter
Energy revenue rises as storage projects are recognized at the year's end. Megapack 3 production began in Texas, and deployments follow customer timelines.2 of 6
- GPT-6.1 Sol$4.1 billion and $4.92 billion respectively
- Gemini 4 Argonsupported our fourth quarter 2026 and 2027 energy storage and fleet revenue growth projections
If all of this happens
$29.7Bsales
$0.49adjusted EPS
Lowabout 1 chance in 10 of worse
What the low case assumes
Orders fade after the mid-year surge, pulling deliveries below the third quarter's. The tax credit is gone and rates are high; part of the backlog may be pull-forward.3 of 6
- GLM 5.3Order rates fading after the pull-forward
- Muse WonderVehicle demand softens as high interest rates and weaker consumer confidence outweigh high fuel prices
- GPT-6.1 SolRising inventory despite incentives, weaker order backlogs
Battery-pack and chip supply keeps deliveries flat near the recent rate. Management names battery packs and electronic parts as the production limit.3 of 6
- Opus 5.5deliveries held flat by battery-pack and chip supply
- GLM 5.3Battery pack and memory shortages capping production into 2027
- Grok 4.7Vehicle deliveries stall near the recent quarterly rate
More cars go into Tesla's own robotaxi fleet instead of being sold. Fleet cars are kept as assets, so they bring no sale revenue up front.2 of 6
- Gemini 4 Argonallocation of vehicle output to the company-owned fleet limit customer vehicle sales revenue
- GLM 5.3some production is diverted to Tesla's own robotaxi fleet
Storage projects slip and prices fall. Deployments are lumpy and tied to customer timelines.2 of 6
- Muse WonderEnergy deployments slip on customer timing and competition
- Grok 4.7Energy storage prices fall faster than volume grows
If all of this happens
$27.0Bsales · −9% vs base
$0.27EPS · −46% vs base
Sales would have to drop to about $27.0B, 9.1% under the base, with adjusted earnings near $0.27, 46% under. Deliveries would have to fall back to or below the third quarter's 486,000 as orders fade or supply stays tight, more cars would go into Tesla's own robotaxi fleet instead of being sold, storage projects would slip into next year, and research spending would keep climbing. Muse Wonder's low is furthest at $24.5B because its base already has no fourth-quarter rise, and its low adds demand that 'softens as high interest rates and weaker consumer confidence outweigh high fuel prices'. Grok's earnings low is furthest at $0.16, where 'Operating profit stays near zero'.
A year earlier, fourth-quarter sales fell 11% from the third quarter and deliveries slid to about 418,000 after buyers pulled purchases forward.
The six lows run from $24.5B (Muse Wonder) to $28.2B (Gemini 4 Argon).
First signFourth-quarter 2026 deliveries at or below the third quarter's 486,000; below 460,000 would signal a sharp miss.
Highabout 1 chance in 10 of better
What the high case assumes
Battery-pack capacity opens up and the backlog converts into deliveries. Pack lines are being added, and the backlog is the largest since 2023.4 of 6
- Opus 5.5battery-pack capacity unlocking the backlog
- GPT-6.1 SolFaster supply expansion and factory utilization
- Grok 4.7Vehicle production breaks the battery-pack bottleneck
- Gemini 4 Argonrapid resolution of battery pack bottlenecks
Megapack 3 ramps ahead of plan, lifting year-end storage revenue. Megapack 3 production began at the new Texas factory.3 of 6
- GLM 5.3Cybercab and Megapack 3 ramps running ahead of plan
- Gemini 4 ArgonAccelerated ramp of Megafactory Texas up to 50 gigawatt-hours per year
- Opus 5.5Megapack 3 and data center demand lifting energy
Self-driving subscriptions keep growing on new deliveries. About 55% of North American deliveries came with a self-driving subscription.2 of 6
- Grok 4.7Full self-driving approvals broaden and subscription attach stays near the recent North American rate
- Muse Wonderservices and software subscriptions grow fast
If all of this happens
$32.5Bsales · +9% vs base
$0.71EPS · +46% vs base
Sales would have to reach about $32.5B, 9.4% above the base, with adjusted earnings near $0.71, 46% above. Pack capacity would have to open up so the backlog turns into deliveries well above the third quarter's, a large batch of storage would be recognized at year end as Megapack 3 ramps in Texas, and higher factory use and subscriptions would lift margins. Sol's high is furthest at $34.8B and $0.85 because it starts from the highest base, with roughly 520,000 deliveries and '$4.1 billion' of energy in the quarter, and adds 'Faster supply expansion and factory utilization' on top.
Fourth quarters have risen before: sales were $25.7B in the fourth quarter of 2024, up 2.1% on the third.
The six highs run from $29.5B (Muse Wonder) to $34.8B (GPT-6.1 Sol).
First signFourth-quarter 2026 production above about 530,000 without inventory building, the first test Opus names.
Watch
Fourth-quarter 2026 deliveries are the key sign: above about 520,000 points higher, at or below 486,000 lower. Watch storage deployments against the third quarter's 13.7 GWh, whether production catches up with deliveries, and any new loan-subsidy offers.