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Tesla reported a record revenue of $28.1 billion for Q3 2025 but faced a significant drop in operating margin, falling from 10.8% to 5.8% in the same period. This equates to an operating profit of only $1.6 billion after accounting for $1.6 billion in R&D expenses. The company may become unprofitable as early as next quarter due to increased R&D costs and the expiration of the federal EV tax credit, which could sharply reduce sales.
In Q3, Tesla’s vehicle sales, particularly the Model 3 and Model Y, which contributed to 96.8% of total sales, may further decline with the introduction of lower-priced versions that could decrease gross profits. Analysts predict a potential net loss for Tesla next quarter, marking the first time since late 2019 that the company could report a loss.
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