Tesla Q3 2026 Earnings: Profit Falls 43% as Optimus Production Begins

Tesla has started building its Optimus humanoid robot at its Fremont, California, factory and says it will begin selling Cybercab robotaxis to customers by the end of 2026, the company said with its third-quarter results on Wednesday, Oct. 21, 2026. The robot milestone arrived alongside weak profits: in its Tesla Q3 2026 earnings, the company reported net income of $787 million, down 43% from $1.37 billion a year earlier, according to TechCrunch.

Image: New Tesla Model S sedans outside the company’s Fremont, California, factory, used for illustration. Photo: Steve Jurvetson, via Wikimedia Commons (CC BY 2.0).

Tesla Q3 2026 earnings at a glance

• Revenue: $28.04 billion, just below the $28.09 billion of the third quarter of 2025, TechCrunch reported.
• Deliveries: 486,532 vehicles, about 6,000 more than the previous quarter but fewer than a year earlier.
• Automotive revenue: $20.6 billion, down 3%, according to Ars Technica.
• Energy storage and solar: down 16% year over year to about $2.8 billion to $2.9 billion, a drop TechCrunch said Tesla blamed on tariff-related customer refunds.
• Services and other: up 33% to $4.6 billion, with a record $734 million in gross profit.
• Operating expenses: up 39% to $4.8 billion, cutting operating margin to 2.6% from 5.8%, Ars Technica said.
• Regulatory credits: $113 million, down from $417 million a year earlier.

Ars Technica reported capital expenditures rose 110% to $4.7 billion in the quarter, while free cash flow fell 62% to $1.5 billion.

Optimus production begins in Fremont

Tesla is making Optimus in factory space once used for electric vehicles. “The bots coming off this line are the first production-quality bots that we have manufactured,” Tesla wrote in its shareholder letter, quoted by TechCrunch. “While we will continue to iterate on the hardware and manufacturing process, we have proven that the current manufacturing process for Optimus is suitable for a commercial product.”

CEO Elon Musk called it “early production” on the earnings call and said the ramp will be slow and “somewhat bumpy because it is such a radically new product.” He also claimed Tesla will be able to make 20,000 robots a week by the end of 2027. “There’s still some things we need to tweak about the design, because you need to deliver a robot that is safe and reliable and has long duration,” he said, adding that “there’s still quite a lot of work to do” on the AI before the robot is useful for open-ended tasks.

For a wider look at where humanoid robots stand, see our earlier report on Figure at BMW, Agility’s SPAC and the race with China.

Cybercab sales and the federal investigation

Lars Moravy, Tesla’s vice president of engineering, said on the call that every Cybercab built so far is going into Tesla’s own robotaxi fleet, but that the company will start delivering the vehicles to customers on a small scale by year-end, TechCrunch reported. Musk said most Cybercabs will remain “Tesla-owned and transported as a service,” and that the two-seater without a steering wheel is meant for ride-hailing rather than personal ownership.

There is a regulatory hurdle. The National Highway Traffic Safety Administration opened an investigation last month into whether the Cybercab meets federal motor vehicle safety standards, which currently require manual controls such as brake pedals. TechCrunch noted the outcome could affect whether Tesla, or anyone else, can legally operate the vehicle.

The timeline for unsupervised Full Self-Driving also slipped again. Ashok Elluswamy, Tesla’s vice president of AI software, said “somewhere around Q2 next year” is when the first customer-owned cars could join the robotaxi fleet. Musk had said in April that the unsupervised version would “probably” arrive in the fourth quarter of this year.

A quieter cut to capital spending

Electrek reported that Tesla’s quarterly 10-Q filing lowered its 2026 capital spending forecast to “in excess of $20 billion,” down from the “more than $25 billion” it had guided since April. Tesla has spent $13.01 billion so far this year, Electrek said, and the 10-Q describes $30 billion of new credit facilities, which Tesla had not drawn on at quarter-end, alongside $45.4 billion in cash and investments. Electrek also noted that much of the quarter’s positive free cash flow came from working-capital timing, including bills not yet paid.

How investors reacted

Tesla stock was volatile on Thursday. Yahoo Finance reported that Tesla and Meta each fell more than 3% at the open, and that the Nasdaq later dropped more than 2% as the AI trade unwound. Yahoo said Tesla investors were weighing lower 2026 capital spending against higher planned spending in 2027 and 2028 on Optimus, Cybercab and Terafab. The results come a day after SpaceX-Tesla merger talk lifted stocks, and during a stretch when AI debt fears have weighed on tech shares.

Sources

• TechCrunch: Tesla starts Optimus robot production in California as profit falls 43%
• TechCrunch: Tesla says it will start selling Cybercabs by end of year
• Ars Technica: Tesla profits drop 43% in Q3
• Electrek: Tesla quietly cuts 2026 capex guidance to $20B
• Yahoo Finance: Stock market today, Oct. 22
• Wikimedia Commons: New Teslas at the factory (CC BY 2.0)