After Record Q3 Deliveries, Can Tesla Deliver an Earnings Beat?

Tesla TSLA is slated to release third-quarter 2025 results on Oct. 22, after the closing bell. The results will primarily center around the company’s vehicle deliveries and automotive profit margins. 

TSLA missed earnings estimates in two of the trailing four quarters for as many misses, the average negative surprise being 3.65%.

Tesla, Inc. Price and EPS Surprise

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Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its second-quarter 2025 automotive segment performance.

Q2 Highlights

Tesla’s second-quarter production totaled 410,244 units (396,835 Model 3/Y and 13,409 other models), which declined 0.1% year over year and missed our estimate of 453,081 units. The company delivered 384,122 vehicles, which fell 13.5% year over year and lagged our estimate of 420,079 units. The Model 3/Y registered deliveries of 373,728 vehicles, which declined 11.5% year over year and fell short of our expectations of 400,574 units.

Total automotive revenues of $16.7 billion were down 16% year over year and lagged our estimate of $18.3 billion. The reported figure also included $439 million from the sale of regulatory credits for electric vehicles, which decreased 50.7% year over year. Automotive sales, excluding revenues from leasing and regulatory credits, totaled $15.8 billion, which missed our projection of $17.4 billion on lower-than-expected deliveries.

Robust Q3 Deliveries to Aid TSLA

Tesla delivered 497,099 cars (481,166 Model 3/Y and 15,933 other models) worldwide in the third quarter, setting a new record. The figure rose 7.4% from the year-ago quarter, after three consecutive quarters of year-over-year decline.The deliveries also beat our model estimate of 435,370 units. The EV tax credit of $7,500, which expired at the end of September, boosted Tesla’s deliveries in the quarter under review. Many customers are likely to have rushed to purchase vehicles to take advantage of the incentive, fueling demand.

Model 3/Y is the company’s most successful EV, accounting for most of Tesla’s sales. During the quarter, Tesla delivered 481,166 of those, exceeding our expectations of 416,456 units.

Based on our delivery estimates, we forecast automotive revenues of $18.8 billion in the quarter to be reported, which represents a decline of roughly 6% year over year. But with deliveries surpassing our projections, automotive revenues are also likely to be stronger. Despite the tariff impact, we expect the cost of automotive sales to decrease 1.5% on a year-over-year basis in the third quarter of 2025. Driven by the interplay of these two factors, we expect the automotive segment to outperform, which is likely to boost Tesla’s overall results.

Overall Earnings & Revenue Projections for Tesla

The Zacks Consensus Estimate for the to-be-reported quarter’s sales and earnings is pegged at $26.27 billion and 52 cents/share. The consensus mark for earnings per share has moved north by 2 cents over the past seven days.

Our proven model predicts an earnings beat for Tesla, as it has the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has an Earnings ESP of +10.08% and carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks With the Favorable Combination in the Auto Space

General Motors GM has an Earnings ESP of +5.02% and a Zacks Rank #3 at present. General Motors is scheduled to post third-quarter earnings on Oct. 21. The Zacks Consensus Estimate for earnings is pegged at $2.26 per share. General Motors exceeded earnings estimates in each of the trailing four quarters, the average surprise being 8%.

BorgWarner BWA has an Earnings ESP of +1.31% and a Zacks Rank #3 at present. The company is slated to post third-quarter earnings on Oct. 30. The Zacks Consensus Estimate for BorgWarner’s earnings is pegged at $1.15 per share. BorgWarner surpassed earnings estimates in each of the trailing four quarters, the average surprise being 13.9%.

Aptiv plc APTV has an Earnings ESP of +4.23% and a Zacks Rank #2 at present. Aptiv is slated to post third-quarter 2025 earnings on Oct. 30. The Zacks Consensus Estimate for earnings is pegged at $1.78 per share. Aptiv surpassed earnings estimates in each of the trailing four quarters, the average surprise being 10.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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