Tesla posts record deliveries as costs and tariffs squeeze margins

Tesla reported third-quarter results after the market closed Wednesday, saying it delivered a record 497,099 vehicles in the quarter but posted a 37 percent decline in profit as rising costs and tariffs eroded margins. The company generated roughly $28 billion in revenue, including $21.2 billion from automotive sales, but core profitability was squeezed by a 50 percent year-over-year increase in operating expenses and nearly $240 million in restructuring charges.

Company officials and investor communications pointed to a surge of U.S. buyers rushing to take advantage of an expiring federal electric vehicle tax credit as a primary driver of the record deliveries. Automotive revenue rose modestly year over year, while other parts of the business showed stronger growth: battery and solar revenue increased about 44 percent to $3.4 billion, and services, including Supercharger fees, grew about 25 percent to roughly $3.4 billion.

Despite top-line gains and improved free cash flow, profitability metrics weakened. Operating margin fell to about 5.8 percent, roughly half levels from earlier periods, and the company reported net income of $1.4 billion. Tesla cited higher research and...