Tesla is set to report its third-quarter results on Wednesday, with analysts forecasting a strong performance fueled by U.S. buyers rushing to take advantage of an expiring $7,500 federal EV tax credit.
However, market watchers are just as focused on CEO Elon Musk’s outlook — particularly whether Tesla’s new, more affordable models can sustain demand in key markets.
Cheaper Models Aim to Revive Sales
Tesla recently introduced “Standard” trims of its Model 3 and Model Y vehicles, priced $5,000 to $5,500 lower than previous versions.
These models feature smaller batteries, less powerful motors, and fewer premium features, such as rear touchscreens and seat-back pockets.
To further attract buyers, Tesla has also reduced lease prices on its higher-end “Premium” variants.
While these strategies may drive short-term sales, they have come at a cost. Tesla’s aggressive discounting has squeezed profit margins and raised investor concerns about long-term sustainability.
Analysts expect Tesla’s vehicle sales to fall 8.5% this year, following last year’s first-ever decline in deliveries, partly attributed to Musk’s polarizing political remarks.
Musk’s Focus on Robotaxis and AI
Investors will also be looking for updates on Musk’s long-promised robotaxi project, which he claims will serve half of the U.S. population by the end of this year.
Cantor Fitzgerald analysts highlighted investor curiosity, asking, “What are the relevant metrics — fleet size, cumulative miles, and territories — you expect in Q4 and 2026?”
Despite Musk’s pivot toward robotics and artificial intelligence, Tesla’s core business still relies heavily on vehicle sales.
Financial Expectations
Tesla’s revenue for the quarter ended September is expected to reach $26.24 billion, up 4.2% year-on-year, according to LSEG data.
Analysts estimate automotive gross margins, excluding regulatory credits, to come in at 15.6%, down from 17.05% a year earlier.
Tesla shares have climbed nearly 10% this year, driven in part by the company’s proposed $1 trillion compensation package for Musk.
Still, the stock remains one of the laggards among the so-called “Magnificent 7” tech giants.
With competition intensifying and global EV demand fluctuating, Tesla’s Q3 report could prove pivotal in determining whether its next growth phase will be led by innovation — or by continued price cuts.