Tesla earnings topped expectations on Wednesday, with the company reporting $1.53 billion in free cash flow and adjusted EPS of $0.48. The stock rose 3% in early trade after the quarterly report showed stronger profitability and cash generation than Wall Street had expected.
The company said revenue reached $28.05 billion, adjusted EBITDA was $3.90 billion, and capital expenditures totaled $4.732 billion. Tesla also reported 486,532 deliveries and 13.7 GWh of energy storage deployments, giving investors a fuller look at how the quarter performed across cars, storage, and spending.
Elon Musk on SpaceX tie-up
Elon Musk said on SpaceX's earnings call Tuesday night that both SpaceX and Tesla had formed special committees to discuss a possible tie-up. He said he could not take part in the discussions because he is a conflicted party, and he added that people should not assume a merger is certain.
“I think both SpaceX and Tesla have formed special committees to discuss this idea,” Musk said. “At the request of shareholders, and these special committees are consist of independent directors. And because I'm a conflicted party, I can't actually be in the discussions of the special committees.”
He also said, “I don't think we should necessarily assume that I think some people out there assume that a SpaceX and Tesla merger is a certainty. And I think that would be overstating it. Do I think it would be a good idea? Yes.”
Capex and 2026 spending
Tesla said it expects more than $25 billion in capital expenditures in 2026, with money slated for Optimus production lines, AI compute, the Cybercab ramp, and the Terafab chip plant. That spending plan sits alongside a quarter in which capex came in below Wall Street estimates, even as the company kept investing heavily in future products.
The spending outlook gives investors a clearer picture of where Tesla intends to put cash after a quarter that turned free cash flow positive by a wide margin versus the negative $4.92 billion expected. The company is signaling that present cash generation and future buildout are moving at the same time.
Deliveries and NHTSA
The report also showed a complication for the quarter: Tesla beat earnings expectations, but deliveries were still down 2% from a year ago. That leaves the stronger financial result running alongside softer vehicle volume, even as the company continues to push new programs.
Tesla faces an Oct. 30 deadline to answer NHTSA's special order requests on how it self-certified the Cybercab as compliant with federal safety standards. The agency issued 21 requests, Tesla asked for an extension to Nov. 20, and NHTSA granted 30 days instead.
How Tesla produced $1.53 billion in free cash flow when Wall Street had expected a negative $4.92 billion is still the most important open question in the report, and the answer will shape how investors read the quarter after the stock's early gain.
