Shares in Tesla Inc. declined 3% in late trading today after the electric car maker fell short on earnings in its fiscal third quarter, despite delivering a record number of vehicles.

For the quarter that ended on Sept. 30, Tesla reported adjusted earnings of 50 cents per share, down from 72 cents per share in the same quarter of 2024, on revenue of $28.095 billion, up 12% year-over-year. Analysts had been expecting adjusted earnings of 56 cents per share on revenue of $26.22 billion.

Tesla manufactured 447,000 vehicles in the quarter and delivered 497,000, a record for both. Model 3 and Y production and deliveries were 435,826 and 481,166, respectively, while other models saw deliveries of 15,933, up 7% year-over-year.

The company’s energy generation business also reported strong figures, with 12.5 gigawatt-hours of energy storage products deployed in the quarter, also a record high for Tesla. Gross profit in the energy generation and storage business also increased sequentially and year-over-year to a record $1.1 billion.

For Tesla’s services and other segment, the company added 3,500 new Supercharging stalls in the quarter, up 18% year-over-year. The quarter also saw the launch of v4 Supercharger cabinets that offer three times the power density and two times the number of stalls per cabinet compared with v3, resulting in higher throughput, higher efficiency, lower cost and faster deployments.

Operating cash flow in the quarter came in at $6.2 billion and free cash flow was nearly $4 billion — another record. Tesla also saw a $4.9 billion increase in cash and investments to $41.6 billion.

In the company’s earnings call, Chief Executive Officer Elon Musk emphasized that though the core vehicle business remains under pressure, pointing to shrinking regulatory credit revenue, margin squeeze and the possibility of a “few rough quarters” ahead, Tesla is pivoting to a broader vision built around autonomy, robotics and energy.

According to Investor’s Business Daily, Musk highlighted that Tesla’s upcoming fleet of robotaxis and the development of the “Optimus” humanoid robot aren’t just add-ons but are central to the company’s long-term strategy of shifting from hardware to software, fleet-based revenues and artificial intelligence-driven growth.

The earnings miss in the quarter may not have weighed on investors minds alone, as Musk also underlined uncertainty in the near term. He cited factors such as global trade policy, tariffs, reduced EV credits and supply chain cost pressures that may dampen traditional auto margins.

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