Tesla reported its financial results for the third quarter of 2025 this afternoon. Earlier this month, we learned that the electric vehicle manufacturer had a pretty good Q3 in terms of sales, which grew by 7.3 percent year over year and cleared out tens of thousands of cars from inventory in the process. However, that hasn’t translated into greater profitability.

Even though revenues grew by 12 percent to $28 billion compared to the same period last year, Tesla’s operating expenses grew by 50 percent. As a result, its operating margin halved to just 5.8 percent. And so its profit for the quarter fell by 37 percent to $1.4 billion.

Some growth in revenue came from its battery and solar division; this increased by 44 percent to $3.4 billion compared to Q3 2024. Services—including the Supercharger network, which is now open to an increasing number of other makes of EV—also grew, increasing by 25 percent to $3.4 billion. EV deliveries increased by 7 percent to 497,099, most of which were the Model 3 sedan and Model Y crossover. Automotive revenues grew slightly less, increasing 6 percent year over year to $21.2 billion.

Q3 saw a bigger profit decline than last quarter, and the first quarter wasn’t great either, but despite that, the automaker isn’t in much danger of falling behind on the rent. Free cash flow grew by 46 percent, and between cash, cash equivalents, and investments at the end of September, Tesla had $41.6 billion with which to pay for its future plans.