Tesla’s report gross sales quarter has provided the corporate a reprieve after a horrible begin to 2025. However CEO Elon Musk is targeted on constructing a “robotic military” and making good on his years-long, unfulfilled promise of self-driving automobiles — duties he wants to perform if he’s to unlock the complete worth of the $1 trillion compensation bundle that Tesla needs to award him.

The strain between Tesla’s present automotive-driven enterprise and the AI-centric one which Musk is aiming for has by no means been extra clear.

Tesla delivered a report variety of autos within the third quarter of 2025, thanks largely to a rush of consumers in the USA who took benefit of the expiring federal EV tax credit score. However that report quarter didn’t result in higher earnings. In reality, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final yr.

Tesla shipped 497,099 automobiles within the third quarter, which generated $21.2 billion in automotive income — the corporate’s greatest income determine in additional than a yr. However Tesla solely pulled in a revenue of $1.4 billion, up simply $200 million from the second quarter of this yr, in accordance with a shareholder letter launched Wednesday. The report quarter got here after an abysmal begin to the yr for Tesla, which noticed gross sales drop mightily partially due to Musk’s involvement with the Trump administration.

The corporate defined within the letter {that a} large enhance in working bills — 50% greater in comparison with the third quarter final yr — was one of many culprits. That working expense bump was due to spending on AI and different R&D initiatives, in addition to “restructuring” costs of almost $240 million. Tesla didn’t clarify what these restructuring costs had been for, however it’s presumably associated to the current resolution to shut down the corporate’s six-year Dojo supercomputer venture.

Tesla cited tariffs as one other drag on earnings this previous quarter, that means Musk spent round $300 million to assist elect a president who has damage the corporate’s enterprise. Tesla’s chief monetary officer Vaibhav Taneja mentioned on a convention name Wednesday the tariff hit was about $400 million.

“We’re at a important inflection level for Tesla and our technique going ahead as we convey AI into the true world,” Musk mentioned on the decision. Tesla is on the “starting of scaling, fairly massively, Full Self-Driving and Robotaxi, and essentially altering the character of transport,” he mentioned.

All of this can put much more strain on the corporate’s remaining quarter of the yr.

Tesla already wants one other report quarter (after which some) if it needs to easily match the variety of automobiles it shipped in 2024 or 2023. The corporate might get some assist from the brand new slightly-cheaper stripped-down variations of the Mannequin 3 and Mannequin Y EVs. However even in that best-case state of affairs, Tesla is method off the trail of fifty% year-over-year development that it as soon as promised to buyers and shareholders.

However Musk has spent the previous couple of years making an attempt to get shareholders, buyers, workers, and everybody else to look past the corporate’s core enterprise of constructing and promoting automobiles. He’s wager the way forward for Tesla on with the ability to create an enormous community of self-driving autos that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will grow to be the best-selling product ever.

Tesla provided little new data on these applications in Wednesday’s letter. Musk mentioned on the convention name that Tesla could begin constructing the third model of Optimus within the first quarter of 2026. He had as soon as promised to construct hundreds of the robots by the top of this yr, however as The Data has reported, Tesla has run into issues in early manufacturing with Optimus.

“Bringing Optimus to market is an extremely troublesome process, to be clear. It’s not like some stroll within the park,” Musk mentioned.

However Musk continued Tesla’s gauzy, unspecific claims about how a lot Optimus will change the world. “You may really create a world the place there isn’t any poverty, the place everybody has entry to the best medical care,” he mentioned. “Optimus can be an unbelievable surgeon.”

The elevated give attention to AI, robotics, and self-driving automobiles (together with beginning manufacturing of the two-seater “Cybercab”) can even price Tesla extra subsequent yr. Taneja mentioned capital expenditures will enhance “considerably” in 2026 due to these initiatives. He additionally mentioned Tesla has needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise battle.

Tesla’s third-quarter outcomes come amid the backdrop of the corporate’s proposal handy $1 trillion price of shares to Musk. That plan is up for a vote on the Tesla’s annual shareholder assembly in just a few weeks. The corporate — and Musk — are campaigning exhausting. Whereas advisor teams like ISS and Glass Lewis are recommending in opposition to the pay bundle, it’s most certainly going to cross given the overwhelming help from shareholders on earlier efforts.

That hasn’t stopped Musk from threatening to stroll away from Tesla if the bundle isn’t accepted.

On Wednesday’s name, he reiterated his declare that he cares extra concerning the voting management the compensation bundle would afford him than the cash.

“I simply don’t really feel snug constructing robotic military right here after which being ousted due to some asinine suggestions from ISS and Glass Lewis, who don’t have any friggin’ clue. I imply, these guys are company terrorists,” Musk mentioned.

This story has been up to date with new info from Tesla’s third-quarter convention name.