Tesla posts lower quarterly profit as artificial intelligence spending surges and robot assembly begins

Tesla's net profit dropped 43 percent year over year to $787 million in the third quarter of 2026, down from $1.37 billion a year earlier. Total revenue held essentially flat at roughly $28 billion, with automotive sales delivering roughly $20 billion on 486,532 deliveries. Meanwhile, operating expenses jumped 39 percent to $4.8 billion and capital expenditures more than doubled to $4.7 billion. [1][2]

The spending surge squeezed operating margins down to 2.6 percent from 5.8 percent in the third quarter of 2025. Services revenue provided a rare bright spot, rising about a third to $4.6 billion behind Full Self-Driving subscriptions and Supercharger demand. In contrast, the solar and energy storage division fell 16 percent to under $3 billion, burdened by tariff-related customer refunds. [1][2]

Amid the tighter margins, Tesla announced it has begun producing commercial-grade Optimus humanoid robots inside converted vehicle manufacturing space at its Fremont, California plant. Chief Executive Elon Musk described the ramp as an early and bumpy effort that requires further design and artificial intelligence refinements, though he targeted a production pace of 20,000 units weekly by late 2027. [2]