Tesla announced on Wednesday that it has begun producing the Optimus humanoid robot at its factory in Fremont, California. The same factory was previously used for manufacturing electric vehicles.
In its third-quarter letter to shareholders, Tesla stated: "The robots that were taken off this production line are among the first we have manufactured to meet mass-production quality standards." The company said, "While we will continue to iterate on the hardware and manufacturing processes, we have already proven that the current manufacturing process is suitable for commercial products."
However, this forward-looking progress is not enough to boost Tesla's overall mediocre third-quarter performance. The quarterly results show that the company is in the middle of a major gamble: revenue remained virtually unchanged, and after increasing investments in Optimus robots, artificial intelligence, and autonomous driving, expenses soared, ultimately leading to a 43% decline in profits.
The company's revenue is still mainly driven by electric vehicle sales. In the third quarter, electric vehicle revenue remained flat year-over-year at $20 billion. Tesla delivered 486,532 cars that quarter, which is about 6,000 more than in the previous quarter, but less than the same period last year.
Tesla's total revenue in the third quarter was $28.04 billion, slightly lower than $28.09 billion in the third quarter of 2025, and also about $200 million less than $28.23 billion in the previous quarter.
Tesla's solar and energy storage business revenue decreased by 16% year-on-year to $2.8 billion, with the company attributing this to customer refunds related to tariffs. The service business, which includes customers subscribing to its fully autonomous (Full Self - Driving) advanced driving assistance software, saw some growth. Tesla's service business grew by 33% year-on-year, with revenue reaching $4.6 billion.
These are not sufficient to offset Tesla's expenditures on artificial intelligence projects and the Optimus robots, and these investments have put obvious pressure on profits.
The company reported a net profit of $787 million, which is a 43% decrease from $1.37 billion in the same period of 2025. The reduction in regulatory compliance sales also put pressure on profitability. Tesla has been able to remain profitable mainly due to a significant improvement in its "Services and Other" business segment, which recorded a record gross profit of $734 million this quarter.
