Consumer Discretionary · NASDAQ: TSLA
Tesla: how the business works
Tesla makes electric cars and battery storage for homes and power grids, with revenue of $94.8 billion in FY2025.
Tesla, Inc. · Austin, Texas · Founded 2003
Last updated · Reviewed by Cityfort Research on
- Revenue, FY2025
- $94.8B
- Net income, FY2025
- $3.8B
- Vehicles delivered, FY2025
- 1.64 million
- Employees, Dec 31, 2025
- 134,785
- Elon Musk's stake (proxy basis), Sep 30, 2026
- 19.8%
01 · The business in one line
What does Tesla do?
Drivers, homeowners and power companies pay Tesla for cars, batteries and services; most of the money goes on making those products, and about $4 of every $100 was left as profit in FY2025.
- Car sales, leasing and regulatory credits brought in 73% of FY2025 revenue ($69.5 billion); energy storage and solar 13%, and services such as charging and insurance 13%.
- Making and delivering the products cost 82% of revenue; research, selling and admin took another 13%.
02 · What it sells
What does Tesla sell?
Electric cars
Model 3, Model Y and Cybertruck. Model 3 and Model Y were 1,585,279 of the 1,636,129 vehicles delivered in FY2025. Model S and Model X were discontinued in mid-2026.
Tesla Semi truck
A heavy electric truck for freight companies. Tesla said volume production began in Nevada in Q3 FY2026.
Battery storage (Megapack and Powerwall)
Powerwall stores power for homes and small businesses. Megapack is a large battery for utilities, businesses and energy companies. Tesla deployed 46.7 GWh in FY2025.
Solar
Solar Roof and solar panels for homes, designed to work with Powerwall.
Services and other
Used cars, paid charging at Tesla Superchargers (fast chargers), repairs, parts and car insurance in 13 US states.
FSD (Supervised) software
A driver-assistance package bought upfront or by monthly subscription. Tesla says it needs active driver supervision and does not make the car autonomous.
Robotaxi rides
A ride-hailing service without a driver, launched in June 2025. Cybercab vehicles joined the Austin fleet on Sep 3, 2026.
What it does
- Does: Designs and builds its own cars and sells them mostly directly to buyers, not through dealers.
- Does: Makes some of its own battery cells, in Texas and Nevada.
- Does: Runs its own fast-charging network, which drivers of other brands can also use in some markets.
- Does: Sells regulatory credits (permits earned under emission rules) to other carmakers.
What it does not do
- Does not: Does not pay a dividend: it has never paid one.
- Does not: Does not sell a car that drives itself: FSD (Supervised) needs an attentive driver.
- Does not: Had not commercialized its Optimus humanoid robot as of the FY2025 10-K; production began in Fremont in Q3 FY2026.
Source: Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026) and 1 more
03 · Who pays it
Who pays Tesla?
Car buyers
69%
of revenue
People and fleets buying new Teslas, plus FSD (Supervised) and other software bought with the car.
Drivers and others using Tesla services
13%
of revenue
Used cars, paid charging, repairs, parts and insurance.
Homes, businesses and utilities
14%
of revenue
Megapack and Powerwall batteries, solar products and related services.
Other carmakers
2%
of revenue
Buy regulatory credits from Tesla to meet emission rules.
Car lessees
2%
of revenue
Drivers who lease a Tesla instead of buying it.
- Car buyers69%
- Drivers and others using Tesla services13%
- Homes, businesses and utilities14%
- Other carmakers2%
- Car lessees2%
How spread out the customers are
Tesla's FY2025 10-K names no customer that made up 10% or more of revenue. A related company, xAI, bought $430 million of Megapacks in FY2025.
04 · How the money flows · FY2025
How does money flow through Tesla?
Money in
- Revenue (cars, energy, services)$94.8B
- Interest earned on cash and investments$1.7B
The company
Tesla
$96.5B came in
Money out
- Cost of making and delivering products and services$77.7B
- Research and development$6.4B
- Selling, admin and restructuring$6.3B
- Interest paid and other net costs$757M
- Income tax$1.4B
- Share of profit for minority partners$61M
- Net income for Tesla's shareholders$3.8B
- In FY2025 customers paid Tesla $94.8 billion, and its cash earned $1.7 billion in interest.
- Making and delivering cars, batteries and services cost $77.7 billion, or 82% of revenue.
- Research took $6.4 billion; selling, admin and restructuring took $6.3 billion.
- Interest paid, other net costs, tax and minority partners took $2.2 billion.
- The $3.8 billion left was net income for Tesla's shareholders.
05 · Where the money goes · FY2025
Where does $100 of Tesla's money go?
Tesla · FY2025
Receipt for every $100
| Making and delivering products | $80.5 |
|---|---|
| Research and development | $6.6 |
| Selling, admin and restructuring | $6.6 |
| Interest paid and other net costs | $0.8 |
| Income tax | $1.5 |
| Minority partners | $0.1 |
| Kept as profit | $3.9 |
| Total | $100 |
Each line = amount ÷ total money in × 100. Lines may not add to exactly $100 because of rounding.
06 · What it needs to run
What does Tesla need to run?
Car factories
Plants in California, Shanghai, Berlin, Texas and Nevada. Stated yearly capacity for Model 3 and Model Y was over 2.25 million cars at Q3 FY2026.
Battery cells
Tesla makes some cells in Texas and Nevada and buys others. It said battery supply limited how many cars it could make in Q3 FY2026.
Battery storage factories
Megapack plants in California (40 GWh), Shanghai (20 GWh) and Texas (50 GWh, production began in Q3 FY2026).
Computing power for AI training
Training computers in Texas (Cortex 1 and 2) with over 225 MW of capacity, used to develop driving and robot software.
Charging network
8,904 Supercharger stations with 84,465 connectors on Sep 30, 2026.
People
134,785 employees worldwide on Dec 31, 2025.
Source: Q3 2026 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
07 · Why it makes money
Why does Tesla make money?
Tesla's profit rises and falls with the margin it earns on each car its factories sell.
Factories, research and computing cost a lot whether or not cars sell. Automotive gross margin fell from 29.3% in FY2021 to 17.8% in FY2025, while research spending rose from $2.6 billion to $6.4 billion. Energy storage, with a 29.8% gross margin in FY2025, became a second source of profit.
Income from operations per $100 of revenue
$12.1$4.6
FY2021 to FY2025
- Tesla builds cars in a few large factories with high fixed costs.
- Selling more cars from the same factories spreads those fixed costs.
- Each car can later earn more from software, charging and insurance.
- Profit and cash pay for research, computing and new products.
- When volumes or prices per car fall, fixed costs stay and margins shrink.
↺ Step 5 feeds back into step 1.
Source: Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Form 10-K, fiscal year 2023 (ended Dec 31, 2023)
08 · Business segments · FY2025
Which businesses make up Tesla?
Automotive
87%Cars, leasing, regulatory credits and services such as used cars, charging and insurance. Gross profit was $13,292 million (16.2% of segment revenue).
Revenue $82.1B
Energy generation and storage
14%Megapack and Powerwall batteries and solar products. Gross profit was $3,802 million (29.8% of segment revenue).
Revenue $12.8B
How the mix changed
- Automotive
- Energy generation and storage
Revenue by segment, FY2021 to FY2025.
US$ · Source: Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
See the numbers
09 · Where it sells · FY2025
Where does Tesla sell?
- United States50%
- China22%
- Other countries28%
10 · Competitors and what protects it
Who does Tesla compete with?
General Motors (NYSE: GM)
Sells electric and petrol cars under Chevrolet, Cadillac and GMC. GM's FY2025 10-K reports a 17.2% share of US vehicle sales and says US policy changes affected its view of EV growth.
Rivian Automotive (Nasdaq: RIVN)
Makes electric pickups, SUVs and delivery vans in the US. Rivian's FY2025 10-K reports 42,247 vehicles delivered and revenue of $5,387 million.
Waymo (part of Alphabet, Nasdaq: GOOGL)
Runs driverless ride-hailing, the market Tesla's Robotaxi enters. Alphabet's FY2025 10-K says Waymo is expanding to more US cities and abroad.
Fluence Energy (Nasdaq: FLNC)
Sells grid-scale battery storage, like Tesla's Megapack. Fluence reported revenue of $2,262.8 million for the year to Sep 30, 2025, down 16.1%.
What protects the business
Each strength is scored 1 (weak) to 5 (strong) for the business, with the reason. It is not a rating of the share.
- Charging network4 of 5
Tesla ran 8,904 Supercharger stations on Sep 30, 2026. Its 10-K says all major carmakers have announced adopting its charging plug standard (NACS) in certain markets.
- Factory scale4 of 5
Stated capacity for Model 3 and Model Y was over 2.25 million cars a year at Q3 FY2026. Tesla produced 1,654,667 vehicles in FY2025.
- Battery storage manufacturing3 of 5
Megapack plants have 110 GWh of stated yearly capacity. The energy segment's gross margin was 29.8% in FY2025.
- Driving software and data3 of 5
Active FSD (Supervised) subscriptions reached 1.74 million on Sep 30, 2026 (Tesla's definition). The software still needs an attentive driver.
- Pricing power in cars2 of 5
Automotive gross margin fell from 29.3% in FY2021 to 17.8% in FY2025, and deliveries fell in both FY2024 and FY2025.
Weak spot
Shrinking operating profit
Income from operations fell from $13,656 million in FY2022 to $4,355 million in FY2025. Regulatory credits equaled 45.8% of it in FY2025, and US law changes have restricted some credit programs.
Source: General Motors Co. Form 10-K, fiscal year 2025 (peer); Rivian Automotive, Inc. Form 10-K, fiscal year 2025 (peer); Alphabet Inc. Form 10-K, fiscal year 2025 (peer: Waymo) and 5 more
11 · Where growth could come from
Where could Tesla's growth come from?
In its Q3 FY2026 Update (Oct 21, 2026), Tesla said it is focused on using its factories at full capacity and gave no delivery forecast. Over time it expects "hardware-related profits to be accompanied by an acceleration of SI, software and fleet-based profits" (SI is Tesla's term for super intelligence). In its Q3 FY2026 10-Q (Oct 22, 2026) Tesla said it expects 2026 capital spending of more than $20 billion.
Energy storage
Working46.7 GWh deployed in FY2025, up 49%
Energy revenue grew from $2.8 billion in FY2021 to $12.8 billion in FY2025. Its share of Tesla's gross profit rose to 22.2%. Megafactory Texas began production in Q3 FY2026.
Status: Working, on track against what the company said.
FSD (Supervised) subscriptions
Working1.74 million active, Sep 30, 2026
Up from 1.04 million a year earlier, on Tesla's own definition (upfront buyers and monthly subscribers, no free trials). Tesla says active driver supervision is required.
Status: Working, on track against what the company said.
Core car volumes
Mixed1,324,681 delivered in 9M FY2026, up 8.8%
Deliveries fell 8.6% in FY2025, then rose in the first nine months of 2026 (Cityfort calculation from Tesla's quarterly figures). Tesla said battery supply limited output in Q3 FY2026.
Status: Mixed, partly on track.
Robotaxi
EarlyNearly 2 million unsupervised miles by Sep 30, 2026
The service launched in June 2025. Cybercab, Tesla's purpose-built Robotaxi vehicle, joined the Austin fleet on Sep 3, 2026.
Status: Early, too early to judge.
Tesla Semi and Optimus
NewBoth entered production in Q3 FY2026
Tesla said Semi volume production began in Nevada (25,000 a year capacity) and Optimus robot production began on Fremont lines. No sales figures were given.
Status: New, recently announced.
Next Gen Roadster
EarlyUnveiled Oct 15, 2026
A new Roadster model shown in Tesla's Q3 FY2026 Update. Tesla lists it as in design development, with production capacity not yet stated.
Status: Early, too early to judge.
Status compares progress with what the company itself said it would do: Working = on track against what the company said; Mixed = partly on track; Behind = behind the company's own plan; New = recently announced; Early = too early to judge.
Source: Q3 2026 Update (Form 8-K, Exhibit 99.1); Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026); Form 10-K, fiscal year 2025 (ended Dec 31, 2025) and 3 more
12 · The numbers · Consolidated · US$
How has Tesla done?
Revenue
$94.8BFY2025
Revenue rose every year from FY2021 to FY2024, then fell 2.9% to $94.8 billion in FY2025.
US$ · Source: Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025) and 3 more
See the numbers
Net profit
$3.8BFY2025
Net income fell from $15.0 billion in FY2023 (with a one-time $5.93 billion tax benefit) to $3.8 billion in FY2025, when stock-based pay was $2.8 billion.
US$ · Source: Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
See the numbers
Profit kept per $100 of revenue
$4.0FY2025
Tesla kept $4.00 of every $100 of revenue as net income in FY2025, down from $15.40 in FY2022.
$ of profit per $100 of revenue (net margin) · Source: Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
See the numbers
Free cash flow
$6.2BFY2025
Free cash flow was positive every year, from $3.6 billion in FY2024 to $7.6 billion in FY2022.
US$ · cash from operations minus spending on plants and equipment · Source: Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
See the numbers
See all yearly numbers
EBITDA here = operating income plus depreciation and amortization (from the cash flow statement). Fiscal years are the company's own (Fiscal year ends on December 31 (the calendar year)). Net profit is the share belonging to the company's owners.
What revenue is made of · FY2025
Regulatory credits are not products: Tesla earns them under emission rules and sells them to other carmakers. They were 2.1% of FY2025 revenue but equal to 45.8% of income from operations (Cityfort calculation).
Revenue by type
13 · The company's own measures · FY2025
What do Tesla's own measures show?
Official (GAAP): Net income attributable to common stockholders
$3.8B
Company's own measure: Adjusted EBITDA
$14.6B
Tesla adds back interest expense, income tax, depreciation, amortization and impairment, stock-based pay ($2,825 million) and net digital-asset losses. The EBITDA elsewhere on this page ($10,503 million) adds back only depreciation, amortization and impairment to income from operations.
Official (GAAP): Net income attributable to common stockholders
$3.8B
Company's own measure: Net income attributable to common stockholders (non-GAAP)
$5.9B
Tesla leaves out stock-based pay and digital-asset gains and losses, after tax.
Official (GAAP): Diluted EPS
$1.08
Company's own measure: Diluted EPS (non-GAAP)
$1.66
Non-GAAP net income divided by the same diluted share count as GAAP EPS.
Official (GAAP): Net cash provided by operating activities
$14.7B
Company's own measure: Free cash flow
$6.2B
Operating cash flow minus capital expenditures, including purchases of energy generation and storage systems. It equals the free cash flow shown in the numbers above.
Official (GAAP)
No official figure measures this; it is the company's own operating measure.
Company's own measure: Active FSD (Supervised) subscriptions
1.1 million
Tesla's definition from its 2025 CEO Performance Award: upfront purchases plus monthly subscriptions, free trials excluded. It was 1.74 million on Sep 30, 2026.
Official (GAAP)
No official figure measures this; it is the company's own operating measure.
Company's own measure: Energy storage deployed
46.7 GWh
Battery storage capacity Tesla delivered to customers in the year. The nearest official figure is energy generation and storage revenue ($12,771 million in FY2025).
These are the company's own measures, defined by the company. They are not comparable across companies, and they are not added together. Each sits beside the nearest official (GAAP) figure.
Source: Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Q3 2026 Update (Form 8-K, Exhibit 99.1); Form 10-K, fiscal year 2025 (ended Dec 31, 2025)
14 · Financial strength · Sep 30, 2026
How much debt does Tesla have?
- Total debt$9.5B
- Cash and investments$45.4B
- Net cash (cash minus debt)$35.9B
- Net worth (shareholders' money)$89.3B
- Debt to equity
- 0.11×
- $ of debt for every $1 of shareholders' money
- Interest cover
- 10×
- how many times operating profit covers interest
- Debt here = debt and finance leases ($1,387 million current + $8,136 million non-current). Operating lease liabilities of $6,922 million are not included.
- Almost all debt is non-recourse: lenders can claim only the specific assets pledged, such as car loans or a China working-capital facility. Recourse debt was $2 million.
- In September 2026 Tesla signed a $20 billion term loan and $10 billion of revolving credit facilities; none was drawn on Sep 30, 2026.
- Not counted in cash: Tesla's SpaceX shares ($2,865 million fair value) and bitcoin ($962 million fair value) on Sep 30, 2026.
- Interest coverage = income from operations ÷ interest expense, four quarters to Sep 30, 2026 ($3,466 million ÷ $348 million; Cityfort calculation).
Source: Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026); Q3 2026 Update (Form 8-K, Exhibit 99.1); Form 8-K: entry into $20bn term loan and $10bn revolving credit facilities (Sep 29, 2026)
15 · Who owns it · ownership as of Sep 30, 2026
Who owns Tesla?
- Officers and directors (as a group), shares
- 20.0%
Share classes
Holders of 5% or more
From the company's proxy statement (DEF 14A), later Schedule 13G filings and the share counts on its latest annual or quarterly report. Each holder row shows the date of its own filing.
Source: Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026); Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026)
16 · Who runs it
Who runs Tesla, and did they deliver?
Elon Musk
Chief Executive Officer (also titled Technoking of Tesla) · since 2008
Also CEO, CTO and chairman of SpaceX, which bought xAI in February 2026. The largest Tesla shareholder.
Vaibhav Taneja
Chief Financial Officer · since 2023
Was Tesla's chief accounting officer from March 2019.
Tom Zhu
Senior Vice President, APAC and Global Vehicle Manufacturing · since 2023
Led the building and running of the Shanghai factory; in his current role since June 2025.
Robyn Denholm
Independent Chair of the Board · since 2018
Chair since November 2018.
What they said, and what happened
1 missed · 2 delivered · 2 partly delivered · 1 too early to tell
Said on Jan 30, 2025
Capital spending expected to exceed $11 billion in 2025.
MissedWhat happened
FY2025 capital spending was $8,527 million.
Said on Jan 28, 2026
Tesla Semi on schedule for volume production starting in 2026.
DeliveredWhat happened
Tesla said in its Q3 FY2026 Update that volume production of Tesla Semi began in Nevada.
Said on Jan 28, 2026
Cybercab on schedule for volume production starting in 2026.
Partly deliveredWhat happened
By Q3 FY2026 Tesla listed Cybercab capacity (over 125,000 a year) as in production and added Cybercabs to its Austin fleet; it gave no production volume.
Said on Jul 22, 2026
Production of Megapack 3 and Megablock to begin in 2026 at the new Megafactory Texas.
Partly deliveredWhat happened
Tesla said Megafactory Texas began production in Q3 FY2026; its Q3 documents do not name Megapack 3.
Said on Jul 22, 2026
Optimus production lines being installed in anticipation of production in 2026.
DeliveredWhat happened
Tesla said Optimus production began on its Fremont lines in Q3 FY2026.
Said on Jan 29, 2026
Capital spending expected to exceed $20 billion in 2026.
Too early to tellWhat happened
Tesla raised the figure to more than $25 billion in April 2026, then restated more than $20 billion in October. Spending was $13.01 billion in the first nine months.
Source: Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026); Form 10-K, fiscal year 2024 (ended Dec 31, 2024); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1) and 5 more
17 · Governance signals
What do Tesla's governance filings show?
- Auditor
- PricewaterhouseCoopers LLP, since 2005
- Auditor changes
- None in the period covered
- Audit qualifications
- None reported
- Related-party dealings
- Elon Musk is an officer, director or major owner of SpaceX (which owns xAI), X and The Boring Company. In FY2025 xAI bought $430 million of Megapacks. In March 2026 Tesla invested about $2.00 billion in SpaceX shares, worth $2,865 million on Sep 30, 2026. SpaceX bought $626 million of Megapacks in the first nine months of 2026.
- Credit rating
- No public credit rating found
Flags to know about
pledge · Sep 30, 2026
CEO's shares pledged for personal loans
Elon Musk had 207,498,721 shares pledged as loan collateral on Sep 30, 2026, 29.7% of his 699,580,882 shares (Cityfort calculation). Tesla's policy caps his loans at the lesser of $3.5 billion and 25% of the pledged shares' value.
related party · Oct 22, 2026
Special committee on ties with SpaceX
Tesla's 10-Q (Oct 22, 2026) says the board formed a committee of disinterested directors "to explore deepening Tesla's relationship with SpaceX, which could be through certain arrangements including without limitation a business combination". Tesla says there is no assurance of any deal.
other · Nov 6, 2025
2025 CEO Performance Award
On Nov 6, 2025 shareholders approved an award of 423,743,904 restricted shares to Elon Musk. They are earned in 12 tranches tied to market value and operating milestones. The proxy lists its maximum grant-date fair value, assuming all performance conditions are achieved, at $132.30 billion.
regulatory · Oct 22, 2026
Government requests for information
Tesla says it receives requests, including subpoenas, from agencies such as NHTSA, the SEC and the Department of Justice. Tesla says that, to its knowledge, no government agency in any ongoing investigation has concluded that any wrongdoing occurred.
other · Oct 22, 2026
Securities class action and Autopilot verdict
A proposed class action filed Aug 4, 2025 alleges misstatements about Autopilot, FSD (Supervised) and Robotaxi; Tesla moved to dismiss. A 2025 jury verdict in a product-liability trial is on appeal. It concerned allegations about Autopilot's use in a 2019 crash. The jury awarded $129 million total compensatory damages (driver 67% and Tesla 33% at fault), plus $200 million punitive.
Source: Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026); Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026) and 1 more
18 · What the market paid · price as of Oct 23, 2026
What did the market pay for Tesla on Oct 23, 2026?
Price as of Oct 23, 2026 (shown for education; prices change daily).
Closing price on Nasdaq as of Oct 23, 2026: $372.22. Market value = $372.22 × 3,952,757,946 shares on the Q3 FY2026 10-Q cover (Oct 15, 2026). That count includes 423,743,904 unearned 2025 CEO award shares. P/E = price ÷ diluted earnings per share for the four quarters to Sep 30, 2026 ($0.91): dollars of share price per dollar of yearly earnings. P/B = market value ÷ shareholders' equity on Sep 30, 2026 ($89,289 million).
- Share price
- $372.22
- Market value (market cap)
- $1.47T
- P/E
- 409×
- P/B
- 16.5×
Source: TSLA historical prices (closing price Oct 23, 2026: $372.22); Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026); Q3 2026 Update (Form 8-K, Exhibit 99.1)
19 · What could go wrong
What could go wrong for Tesla?
- Competition
Falling profit on cars
Automotive gross margin fell from 29.3% in FY2021 to 17.8% in FY2025. Deliveries fell 1.1% in FY2024 and 8.6% in FY2025. Tesla's 10-K says competition in electric cars keeps growing.
Watch Automotive gross margin and quarterly deliveries.
- Regulation
Regulatory credits are shrinking
Credits equaled 45.8% of FY2025 income from operations. Tesla says US government actions restricted some credit programs. Q3 FY2026 credit revenue was $113 million, down 73% from a year earlier.
Watch Regulatory credit revenue each quarter.
- Execution
Heavy spending on new products
Tesla said in its Q3 FY2026 10-Q (Oct 22, 2026) that it expects 2026 capital spending of more than $20 billion. The spending covers AI computing, factories, Robotaxi, Semi and Optimus. Free cash flow was negative $1,092 million in Q2 FY2026. Its 10-K calls humanoid robots a nascent industry.
Watch Quarterly free cash flow and capital spending.
- Governance
Dependence on Elon Musk
Tesla's 10-K lists dependence on Elon Musk as a risk. He also runs SpaceX, which does business with Tesla, and a board committee is exploring deeper ties.
Watch Any announcement from the special committee on SpaceX.
- Governance
Pledged CEO shares
Elon Musk had 207,498,721 shares pledged for personal loans on Sep 30, 2026. Tesla's 10-K says a forced sale of pledged shares could cause the share price to fall.
Watch Pledged share count in the next proxy statement.
- Legal
Driver-assistance lawsuits and inquiries
Tesla faces a securities class action alleging misstatements about Autopilot, FSD (Supervised) and Robotaxi. A 2025 jury verdict in a product-liability trial over allegations about Autopilot's use in a 2019 crash is on appeal. It awarded $129 million total compensatory damages (driver 67% and Tesla 33% at fault), plus $200 million punitive.
Watch The appeal in the Eleventh Circuit and the ruling on Tesla's motion to dismiss.
- Raw-material prices
Battery supply and tariffs
Tesla said battery supply limited car output in Q3 FY2026. Its 10-K says US tariffs and a US law, the OBBBA, could raise battery cell costs.
Watch Production versus deliveries each quarter.
Source: Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Form 10-K, fiscal year 2023 (ended Dec 31, 2023); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1) and 3 more
20 · How it got here
How did Tesla get here?
2003
Milestone
Incorporated
Tesla was incorporated in Delaware on Jul 1, 2003. It became a Texas corporation on Jun 13, 2024.
2016
Business-model change
Bought SolarCity
Tesla acquired solar installer SolarCity in November 2016. Solar is now part of its energy segment.
2022
Milestone
Highest operating margin of the five years
Revenue rose 51.4% to $81.5 billion, and income from operations reached 16.8% of revenue.
2023
Crisis
Margins fell
Gross margin fell from 25.6% to 18.2%. Net income rose to $15.0 billion, helped by a one-time $5.93 billion tax benefit; pre-tax income fell 27%.
2024
Crisis
Car deliveries started falling
Deliveries fell 1.1% to 1,789,226 in 2024, then 8.6% to 1,636,129 in 2025.
2025
Business-model change
Robotaxi service launched
Tesla launched its Robotaxi service, a driverless ride-hailing platform, in June 2025.
2025
Milestone
Shareholders approved a new CEO award
On Nov 6, 2025 shareholders approved the 2025 CEO Performance Award of 423,743,904 restricted shares for Elon Musk.
2026
Milestone
Invested in SpaceX
Tesla completed an investment of about $2.00 billion in SpaceX shares on Mar 12, 2026. A board committee later began exploring deeper ties.
2026
Business-model change
New products enter production
Model S and Model X ended in mid-2026. Cybercab production began in Q2; Semi and Optimus followed in Q3. Tesla unveiled the Next Gen Roadster on Oct 15.
Source: Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026); Form 10-K, fiscal year 2023 (ended Dec 31, 2023) and 5 more
21 · Both sides
What do supporters and critics point to?
What supporters point to
- Energy revenue grew from $2.8 billion in FY2021 to $12.8 billion in FY2025, with a 29.8% gross margin in FY2025.
- On Sep 30, 2026 Tesla held $45.4 billion of cash and short-term investments against $9.5 billion of debt and finance leases.
- Free cash flow was positive in each year from FY2021 to FY2025.
- Active FSD (Supervised) subscriptions rose from 1.04 million to 1.74 million in the year to Sep 30, 2026 (Tesla's definition).
- Cybercab entered production in Q2 FY2026, and Tesla Semi and Optimus in Q3 FY2026, Tesla said.
What critics point to
- Income from operations fell from $13.7 billion in FY2022 to $4.4 billion in FY2025.
- Vehicle deliveries fell in both FY2024 and FY2025.
- Regulatory credits equaled 45.8% of FY2025 income from operations, and US rule changes have restricted some programs.
- Stock-based pay of $2.8 billion in FY2025 equaled 74% of net income (Cityfort calculation).
- Tesla sells to and invests in SpaceX, a company Elon Musk also runs, and a committee is exploring deeper ties.
22 · What to watch next
What should you watch next at Tesla?
Next event
Q4 FY2026 results (expected; not yet announced by Tesla, estimated from last year's date)
Jan 28, 2027
Expected, based on last year's date
Annual meeting on Dec 3, 2026
Shareholders vote on three directors, executive pay and the auditor.
Car margins without credits
Regulatory credits fell 73% in Q3 FY2026, so automotive gross margin depends more on the cars themselves.
Spending versus cash
Tesla said in its Q3 FY2026 10-Q (Oct 22, 2026) that it expects 2026 capital spending of more than $20 billion; watch quarterly free cash flow.
SpaceX committee
Any proposal from the special committee would need its recommendation and any required shareholder approval.
23 · Key facts
Key facts about Tesla
- What does Tesla do?
- Tesla, Inc. designs, builds and sells electric cars, battery storage and solar products, and runs charging, insurance and repair services. Tesla had revenue of $94,827 million in FY2025 (the year to Dec 31, 2025).
- How does Tesla make money?
- Tesla made 69.4% of its FY2025 revenue ($65,821 million of $94,827 million) from selling cars. Energy generation and storage brought in 13.5% and services and other 13.2%.
- Who are Tesla's customers?
- Tesla sells its cars mostly directly to buyers rather than through dealers, and sells Megapack batteries to utilities, businesses and energy companies. In FY2025 Tesla also earned $1,993 million selling regulatory credits to other carmakers.
- How big is Tesla?
- Tesla had FY2025 revenue of $94,827 million and net income of $3,794 million. Tesla delivered 1,636,129 vehicles in FY2025 and had 134,785 employees on Dec 31, 2025.
- Who owns Tesla?
- Elon Musk beneficially owned 19.8% of Tesla's common stock on Sep 30, 2026, on the 2026 proxy's basis. Of his shares, 207,498,721 were pledged. Vanguard Capital Management held 5.3%.
- How did Tesla do in Q3 FY2026?
- In Q3 FY2026 (July to September 2026) Tesla had revenue of $28,046 million, almost flat from $28,095 million a year earlier. Net income fell to $787 million from $1,373 million.
- How large is Tesla's energy business?
- Tesla's energy generation and storage segment had FY2025 revenue of $12,771 million and gross profit of $3,802 million. Tesla deployed 46.7 GWh of battery storage in FY2025.
- How much debt and cash does Tesla have?
- On Sep 30, 2026 Tesla had $9,523 million of debt and finance leases and $45,447 million of cash, cash equivalents and short-term investments.
- Does Tesla pay a dividend?
- Tesla has never declared or paid a cash dividend, its FY2025 10-K says. Tesla's cash flow statements show no share buybacks in FY2021 to FY2025.
Source: Form 10-K, fiscal year 2025 (ended Dec 31, 2025); Q4 and FY2025 Update (Form 8-K, Exhibit 99.1); Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026) and 3 more
24 · Sources and changes
Where every number on this page comes from
Sources (18 documents)
- S1Form 10-K, fiscal year 2025 (ended Dec 31, 2025) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Jan 29, 2026
- S2Form 10-K, fiscal year 2024 (ended Dec 31, 2024) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Jan 30, 2025
- S3Form 10-K, fiscal year 2023 (ended Dec 31, 2023) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Jan 29, 2024
- S6Form 10-Q, Q3 2026 (quarter ended Sep 30, 2026) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 22, 2026
- S8Form 10-Q, Q1 2026 (quarter ended Mar 31, 2026) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Apr 23, 2026
- S9Q3 2026 Update (Form 8-K, Exhibit 99.1) · Tesla, Inc. (SEC EDGAR; also ir.tesla.com) · Tier 1: company or exchange filing · Oct 21, 2026
- S10Q2 2026 Update (Form 8-K, Exhibit 99.1) · Tesla, Inc. (SEC EDGAR; also ir.tesla.com) · Tier 1: company or exchange filing · Jul 22, 2026
- S11Q4 and FY2025 Update (Form 8-K, Exhibit 99.1) · Tesla, Inc. (SEC EDGAR; also ir.tesla.com) · Tier 1: company or exchange filing · Jan 28, 2026
- S12Q3 2025 Update (Form 8-K, Exhibit 99.1) · Tesla, Inc. (SEC EDGAR; also ir.tesla.com) · Tier 1: company or exchange filing · Oct 22, 2025
- S13Q3 2026 Production, Deliveries & Deployments (Form 8-K, Exhibit 99.1) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 2, 2026
- S14Definitive proxy statement (DEF 14A), 2026 Annual Meeting (Dec 3, 2026) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 19, 2026
- S16Form 8-K: results of the 2025 Annual Meeting (Nov 6, 2025) incl. 2025 CEO Performance Award approval · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Nov 7, 2025
- S17Form 8-K: entry into $20bn term loan and $10bn revolving credit facilities (Sep 29, 2026) · Tesla, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Sep 29, 2026
- S18TSLA historical prices (closing price Oct 23, 2026: $372.22) · Nasdaq · Tier 2: rating agency or regulator · Oct 23, 2026
- S19General Motors Co. Form 10-K, fiscal year 2025 (peer) · General Motors Co. (SEC EDGAR) · Tier 1: company or exchange filing · Jan 27, 2026
- S20Rivian Automotive, Inc. Form 10-K, fiscal year 2025 (peer) · Rivian Automotive, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 12, 2026
- S21Alphabet Inc. Form 10-K, fiscal year 2025 (peer: Waymo) · Alphabet Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 5, 2026
- S22Fluence Energy, Inc. Form 10-K, fiscal year ended Sep 30, 2025 (peer) · Fluence Energy, Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Nov 25, 2025
Changes to this page (v1 · Oct 27, 2026)
- v1 · Oct 27, 2026First version. (first version)
Numbers come only from tier 1 and tier 2 sources. Read how we research.
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