Tesla's quarter: thinner profit, and a SpaceX committee on file

What happened

Tesla reported on Wednesday 21 October that third-quarter revenue was $28.0 billion, about the same as a year earlier, and net income for shareholders was $787 million against $1,373 million. ^{[1, 2]}

Its quarterly report, filed on Thursday 22 October, says the board has formed a special committee of disinterested directors to explore a closer relationship with SpaceX, possibly a merger. The report says there is no assurance a deal happens. Its risk factors point back to the annual report and add none. ^[3]

Why it matters

Operating income was $718 million, against $1,624 million a year earlier, as research and development cost $2,761 million, up from $1,630 million, outrunning a larger gross profit, the update shows. ^[2]

The filing puts on Tesla's record what Elon Musk described on SpaceX's earnings call on Tuesday 20 October; Tesla's July quarterly report had no such passage. Musk said both boards formed committees at shareholders' request and that, as a conflicted party, he cannot join their talks, TechCrunch reported. ^{[3, 4, 6]}

Cash, spending and tariffs

Capital spending, the money for factories, computers and equipment, was $4,732 million in the quarter. Free cash flow, operating cash less that spending, was $1,531 million, and cash and short-term investments ended September at $45.4 billion, the update shows. ^[2]

The 10-Q now expects 2026 capital spending in excess of $20 billion, against in excess of $25 billion in the July report; nine months' spending was $13.01 billion. Electrek, writing before the 10-Q was filed, still cited the $25 billion figure. ^{[3, 4, 7]}

A Supreme Court ruling in February struck down tariffs imposed under an emergency powers law, making Tesla eligible for refunds. In the quarter it booked $526 million of refunds against storage costs and $260 million against car costs, and cut storage revenue by $339 million owed back to customers, the 10-Q says. Energy generation and storage revenue was $2,881 million, down 16 percent. ^{[3, 2]}

Cars and robotaxis

Tesla delivered 486,532 vehicles and built 464,391, against 497,099 deliveries a year earlier. It began Robotaxi rides in its Cybercab in Austin on Thursday 3 September and said battery supply was still the limit on car output. It ended the quarter with its largest passenger car backlog in four years, it said. ^{[2, 5]}

What settles it next

Any SpaceX transaction would need the special committee's recommendation and, if agreed, any shareholder approval required, the 10-Q says. Musk said a Tesla vote would need half of all shares, not only those voting, TechCrunch reported. Tesla's annual meeting is on Thursday 3 December, its proxy says. ^{[3, 6, 8]}

Who it reaches

Tesla (TSLA) is direct: the results, the committee and the spending plan are in its own filings. Space Exploration Technologies (SPCX) is adjacent: it is the other side of the committee's work, and it bought $221 million of Megapack batteries from Tesla in the quarter, the 10-Q says. ^[3]