22 October 2026
If you are covering Tesla's latest results, please see the following comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
"Tesla's Q3 results were incrementally positive, with the quarter providing further evidence that the investment case is increasingly centred on autonomy, robotics and software.
"The biggest positive was Full Self-Driving (FSD), where North American attach rates exceeded 75% of new vehicle sales, up 20 percentage points quarter-on-quarter (qoq), and active subscriptions rose to 1.74 million, with potential for approval in regions such as the EU shortly. This is supporting the view that software is becoming a meaningful driver of both demand and margins.
"Automotive gross margin excluding regulatory credits of 18.1% comfortably beat expectations, driven by higher FSD penetration, mix and operational efficiencies. Management also highlighted its largest passenger vehicle backlog in four years.
"Energy was another bright spot, with strong Megapack, Tesla's battery energy storage product, demand, particularly from data centres.
"It was encouraging to see Robotaxi, Tesla's autonomous ride-hailing service, progress, with expansion beyond Austin, rising autonomous miles driven and growing confidence that commercial scaling is becoming tangible.
"The main debate remains around investment spending and valuation. While free cash flow, broadly the cash generated after capital expenditure, surprised positively and 2026 capital expenditure (capex) guidance was reduced, much of the cash flow beat was driven by lower-than-expected capex and working-capital benefits. The improvement in automotive margins was largely offset by a sharp increase in operating expenses, particularly research and development (R&D) spending on artificial intelligence (AI), Robotaxi, Optimus, Tesla's humanoid robot, and semiconductor projects, alongside higher stock-based compensation and selling, general and administrative (SG&A) costs. As a result, the operating margin stood at just 2.6%."
