Tesla, net income down 44% in the third quarter: the company cuts projected spending for 2026

Tesla closed the third quarter of 2026 with revenue of $28.046 billion, substantially unchanged from the same period the previous year, according to the financial statement released by the company to investors. Net income attributable to common shareholders, calculated under GAAP accounting principles, came in at $787 million, or $0.22 per diluted share.

According to Associated Press calculations, this represents a 44% decline compared to the previous year’s quarterly net income. The figure marks a divergence between stable revenue and contracting profitability, a profile that Tesla had attributed in past quarters to several combined factors: pressure on vehicle selling prices, costs linked to production expansion, and growing investment in new business lines, from energy to artificial intelligence applied to autonomous driving.

The quarter nonetheless produced positive free cash flow of $1.5 billion, against quarterly capital expenditure of $4.7 billion. In the investor presentation accompanying the release of the results, the company revised downward its capital expenditure forecast for the full year 2026, bringing it from $25 to $20 billion.

The revision marks a shift from the guidance provided in previous quarters, when the company had steered investors toward a trajectory of rising spending linked to the expansion of plants and production capacity. Lower capital expenditure, with revenue unchanged, can translate into stronger cash flow in the short term, but it also reduces the pace of future expansion of the production lines on which the company has built part of its narrative to the markets.

The cut to the 2026 spending forecast is the figure that financial analysts will keep under observation in the coming quarters, to understand whether it reflects a choice for efficiency or a slowdown in plans to expand production capacity.