Tesla posted stronger-than-expected adjusted earnings and free cash flow for the third quarter of 2026, while confirming that independent committees are reviewing a potential combination with SpaceX.
The electric vehicle maker reported $28.05 billion in quarterly revenue, slightly below the Bloomberg consensus estimate of $28.13 billion.
Adjusted earnings reached $0.48 per share, exceeding the $0.44 forecast, and adjusted EBITDA totaled $3.90 billion against expectations of $3.66 billion.
Tesla recorded $1.53 billion in free cash flow, far above the estimated negative $4.92 billion, while capital expenditures came in at $4.732 billion, below the $7.96 billion analysts had anticipated.
Shares rose in after-hours trading following the results.
Optimus Production Begins as AI and FSD Expand
Tesla delivered 486,532 vehicles during the quarter, a 2% decline from a year earlier but above the Bloomberg consensus of 463,000.
Energy storage deployments increased to 13.7 gigawatt-hours from 12.5 gigawatt-hours a year earlier and 13.5 gigawatt-hours in the second quarter.
The company confirmed that production of its Optimus humanoid robot had begun at its Fremont factory, saying the current manufacturing process is suitable for a commercial product even as hardware and manufacturing improvements continue.
Tesla aims to reach 400 megawatts of artificial intelligence training compute by the end of 2026, while active Full Self-Driving subscriptions increased to 1.74 million.
Tesla has forecast more than $25 billion in capital expenditures for 2026, compared with approximately $8.5 billion spent in 2025, with planned investments including Optimus production lines, AI computing infrastructure, the Cybercab production ramp-up, and the Terafab chip plant being developed with SpaceX.
Musk addressed the possibility of a Tesla-SpaceX combination during SpaceX's earnings call on Tuesday night, confirming that both companies had established independent committees to examine the proposal.
He said the committees were formed at shareholders' request and consist of independent directors, and that he would not participate in their discussions because he is a conflicted party.
Musk cautioned against treating a merger as a settled outcome despite expressing support for the idea.
"I don't think we should necessarily assume that I think some people out there assume that a SpaceX and Tesla merger is a certainty.
And I think that would be overstating it. Do I think it would be a good idea?
Yes," Musk said.
The discussions remain distinct from a confirmed transaction, and the companies have not announced a completed merger.
Tesla's vehicle sales showed divergent regional trends.
In the United States, the expiration of the $7,500 federal electric vehicle tax credit followed a surge in purchases during the third quarter of 2025, creating a tougher comparison for the latest period.
Cox Automotive estimated that Tesla sold approximately 144,100 electric vehicles in the United States during the third quarter, down nearly 20% year over year.
Despite the decline, Tesla accounted for about 54% of the US electric vehicle market, more than all other brands combined.
Separately, analysts raised their price targets for SpaceX stock after the company's third-quarter results exceeded expectations on Tuesday, describing the performance as impressive, according to Investors.
com coverage published October 21.
