Tesla, Inc. (טסלה)

Tesla, Inc. designs, manufactures and sells electric vehicles — mainly the Model 3 and Model Y, alongside the Cybertruck — and energy storage systems for the grid (Megapack) and homes (Powerwall). Around the vehicle fleet sits a services layer: used vehicle sales, service and repair, Supercharger charging, insurance, and subscriptions to FSD (Supervised) driving software. Headquarters are in Austin, Texas, with factories in California, Texas, Nevada, Shanghai and Berlin.

Revenue for the 12 months to June 2026 was $103.6 billion — above $100 billion for the first time. Vehicle sales were about 71% of quarterly revenue, services about 16% and energy about 11%. Management describes the company's aim as "bringing artificial intelligence into the real world": an autonomous ride service (Robotaxi), a purpose-built vehicle for it (Cybercab), whose production began in Q2, and a humanoid robot (Optimus), whose first production lines are being installed at the Fremont factory.

The CEO, Elon Musk, is also CEO of SpaceX. In 2026 the CEO exercised about 304 million options under the 2018 award after the Delaware Supreme Court reinstated it. He also holds 423.7 million restricted shares under the 2025 award, conditioned on market-capitalization and operational milestones. Tesla reincorporated in Texas in June 2024.

The quarter: revenue up, operating income down

In April–June 2026 revenue rose 26% to $28.2 billion. Vehicle sales rose 27%, mainly on roughly 25% more deliveries against a weak prior-year quarter (the Q2 2025 lines were changed over to the new Model Y). Services rose 50% and energy 13%. Regulatory credit revenue — emission credits Tesla sells to other manufacturers at almost no cost — fell 67% to $146 million, which the filing attributes to restrictions on credit programs.

Gross profit rose 23%, but operating expenses rose 47%: R&D +49% (mainly AI, per the filing) and SG&A +45% (including $283 million more stock-based compensation, mainly for the 2025 CEO award). Operating income fell 57% to $398 million — a 1.4% margin. Interest income on cash ($422 million) exceeded operating income in the quarter.

What needs to be normalized: net income of $1,114 million includes three non-operating items. (1) A $1,005 million pre-tax revaluation gain ($763 million after tax) on Tesla's SpaceX shares. (2) A $274 million release of a California tax valuation allowance. (3) A $112 million pre-tax bitcoin revaluation loss ($87 million after tax). Excluding all three, net income for the quarter is about $164 million. The quarter also includes a foreign-exchange loss of about $312 million on intercompany balances; such a loss recurred in each of the last four quarters, and if it is excluded as well, normalized net income rises to about $400 million. About 78% of normalized pre-tax income is net interest income.

"Net income excl. revaluations and one-off tax" = reported, less SpaceX and bitcoin revaluation gains (or plus their losses) and the tax allowance release, per the company's reconciliation table. Foreign exchange is not excluded.

The multi-year context

In 2023–2025 revenue was nearly flat ($96.8, $97.7 and $94.8 billion) while operating income fell from $8.9 to $4.4 billion. Operating margin fell from 9.2% to 4.6%, and was 4.2% over the last four quarters. Two opposing trends sit inside these numbers: gross profit excluding regulatory credits rose 34% in Q2 year over year, and automotive margin excluding credits rose from 15.0% to 16.3%; at the same time R&D, stock-based compensation and legal costs grew faster.

* Includes a one-time tax benefit of about $5.0 billion from releasing a deferred tax asset valuation allowance.

On 30.6.2026 Tesla held $43.5 billion in cash and short-term investments. Debt was $9.1 billion (principal), almost all non-recourse to the parent: a China working-capital facility ($5.9 billion) and notes backed by leases and financing receivables. Recourse debt was only $2 million. Net cash: $34.4 billion. Shareholders' equity: $86.9 billion.

Investment cycle: Q2 capital expenditures reached $5.79 billion, 2.3 times Q1, and free cash flow was negative (−$1.09 billion) for the first time since Q1 2024. According to management, 2026 capital expenditures will exceed $25 billion — mainly AI compute and data centers, production lines, a company-owned vehicle fleet, and service and charging infrastructure. $8.28 billion was spent in the first half. The "AI infrastructure" line in property, plant and equipment rose from $6.8 to $10.8 billion in six months. Per the filing, periods of high capital spending will require funding beyond operating cash flow.

New credit facilities: on 29.9.2026 Tesla signed $30 billion of unsecured facilities: a three-year delayed-draw term loan ($20 billion, stepping down to $10 billion after one year), a five-year revolver ($8 billion) and a 364-day facility ($2 billion). The previous $5 billion revolver was terminated. The company states it does not currently plan to draw on the facilities in 2026.

Non-operating assets: SpaceX shares worth $3.0 billion (a $2.0 billion investment in March 2026, originally in xAI shares; under 1% of the company; sale restriction until December 2026), and about 11,500 bitcoin worth $0.67 billion.

Share basis: 3,949 million shares issued, including 423.7 million unearned performance shares of the 2025 CEO award. Weighted diluted shares in the quarter: 3,540 million. Market cap on 5.10.2026 is therefore $1.50 trillion on issued shares, or $1.34 trillion excluding the performance shares. Tesla has no buyback and pays no dividend.

Tesla reports two segments — automotive (including services) and energy — measured at gross profit only. The filings show no segment operating income and no separate disclosure of revenue from autonomous driving, Robotaxi or Optimus.

Automotive: automotive margin excluding regulatory credits was 16.3%, vs. 15.0% a year earlier and 19.2% in Q1. Per the company, average selling price (ex-currency) declined and cost per vehicle fell on lower import duties. Active FSD subscriptions: 1.48 million, up 56% in a year. Revenue outside the US and China rose 62%.

Energy: gross margin fell to 20.4%, from 30.3% a year earlier and 39.5% in Q1. The company attributes the decline to a lower average Megapack price, mix, and warranty charges related to a supplier's battery-cell issue. The filing does not quantify the charge. Energy inventory rose from $2.7 to $4.1 billion in six months. Contracted backlog not yet performed (contracts over one year): $10.05 billion. $318 million of energy revenue in the quarter came from sales to SpaceX, a related party; excluding it, energy revenue grew about 1%.

Q3 2026: production and deliveries only, from the company's release of 2.10.2026. Deliveries fell 2.1% vs. Q3 2025 and storage deployments rose 9.6%.

The differentiation the company presents is vertical integration: designing and building about 1.6 million vehicles a year, producing batteries and their inputs (4680 cells, cathode and lithium refining in Texas), a charging network of about 82,000 connectors at 8,704 stations whose plug standard has been adopted by other manufacturers, a fleet of about 9.7 million vehicles that collects driving data, and in-house AI training compute (Cortex). Management describes the current production constraint as battery-pack capacity.

Where the filings show pressure: automotive revenue declined in 2024 and 2025, and the company cites a lower average selling price. Automotive margins excluding credits of 15%–19% are manufacturing margins, not software margins. Regulatory credit revenue, until recently a significant part of operating income, is shrinking per the filing because of regulatory changes. In energy, the company states that tariffs and US legislative changes weigh more heavily than in automotive.

Autonomous driving: per the company, the Robotaxi service operates in seven US metro areas, in six of them ramping without a safety driver, and FSD (with driver supervision) has been approved in five European countries. The filings do not disclose revenue, costs or fleet size for the service. This review does not include competitor data from primary sources.

Risks that emerge from the filings

• Key-person dependence: the CEO also runs SpaceX. The 2018 and 2025 awards depend on his continued service (the 2018 award shares vest only in January 2028).
• Related parties: a $2 billion investment in SpaceX shares, and Megapack sales to SpaceX of $405 million in the first half.
• Regulatory credits: per the filing, credit programs have been restricted; revenue from them fell 67% in the quarter.
• Capital spending and funding: more than $25 billion in 2026 per management; negative free cash flow in Q2.
• Legal proceedings: in Benavides (Autopilot), the jury awarded $129 million in compensatory damages (33% attributed to the company) and $200 million in punitive damages; on appeal. Class actions on driving capabilities, including a securities action; a California civil-rights trial that began in September 2026.
• Tariffs and policy: per the company, the tariff regime weighs more on energy; US EV incentives have been eliminated.
• Currency: the company does not hedge; a 10% move equals about $1.64 billion before tax.
• Residual value guarantees: maximum exposure of $4.07 billion to financing banks.

Items to monitor in the Q3 report (21.10.2026)