According to Zhitong Finance APP, after-market on October 21, Tesla (TSLA.US) will release its third-quarter financial results. The company’s third-quarter deliveries declined by 2.1% year-over-year; however, its current forward P/E ratio exceeds 200x, reflecting market expectations for autonomous driving software and energy storage technologies rather than current automotive operating profit margins.
Prior to this, on the evening of October 15, at SpaceX's McGregor test facility in Texas, Tesla unveiled the long-delayed second-generation Roadster: the vehicle traveled along a giant U-shaped
Hover upside down, then rely on SpaceX
The jointly developed cold-gas thrusters lifted off, completed a barrel roll in midair, then landed steadily and drove back to the demonstration runway. Musk called it “the greatest product demo ever,” and left behind a widely quoted remark: “Turns out, flying cars are real.” The demonstration, held six days before the earnings report, set up a new forward-looking guidance point for Musk’s earnings call; but on Wall Street, it wasn’t the car that did backflips that moved the stock price.
A textbook demonstration against an uncooperative capital market
The technical details of the demonstration are indeed rare: the chassis fans generate suction to invert the vehicle and adhere it to the runway, while cold-gas thrusters enable lift-off and attitude control; the entire maneuver is performed remotely via pre-programmed instructions with no driver inside (source: Tonghuashun, Eastmoney, citing on-site reports). Tesla claims
0–60 mph acceleration in 0.81 seconds, available in three versions: Performance, Sport with rear thrusters, and Full-Body Thruster with short-duration flight stabilization.
Rocket. Booking thresholds announced simultaneously—Performance requires a $50,000 deposit, Thrust version requires $250,000, and Rocket version is an invite-only single-seat model.
The commercialization side is the issue. The Roadster's production target is set for 2028, while the delivery date promised when the car was first unveiled in 2017 was 2020 (JPMorgan's Rajat).
Gupta). More importantly, compliance: the Rocket version with the full flight kit is not permitted on public roads and is restricted to enclosed venues; only the Performance version is allowed on public roads.
The version does not include the full flight kit—“what can fly can’t be bought, and what can be bought can’t fly.” The European Union Aviation Safety Agency has also stated that any vehicle operated as an aircraft must meet applicable aviation safety requirements. Original author: Brett
Ashcroft Green put it more directly: Even the Rocket version could not possibly have the capabilities shown in the demo, “DOT and NHTSA
Clearly not ready for cars that can drive through traffic jams.
The market's reaction confirmed this caution. On the first trading day following the demonstration (October 16), Tesla's stock rose more than 2% during intraday trading but closed down 2.13% at $354.72.
The U.S. dollar fell 7.31% for the week, with its year-to-date decline expanding to approximately 21%. During the same period, the Nasdaq 100 Index dropped 5.49% and NVIDIA fell 6.61%—AI
The cooling of trading has been the dominant force this week, weighing on high-multiple growth stocks.
The facts are on the table: delivery has exceeded expectations, while profit forecasts have been continuously lowered.
The Q3 delivery figures were announced on October 2: 486,532 vehicles, up 1.3% quarter-over-quarter and marking the second consecutive quarter above market expectations, but still 10,657 fewer than the 497,099 delivered in the same period last year.
down 2.1%. Structurally, deliveries of Model 3/Y amounted to 478,237 units, roughly flat year-over-year, while other models totaled only 8,295 units, a sharp decline of 47.9% year-over-year. Cybertruck
The main reason is the cooling demand; the high base from the same period last year is also significant—this was a buying surge ahead of the September 30, 2025, expiration of the $7,500 federal tax credit. Energy storage capacity installed: 13.7
GWh, up 9.6% year-over-year and up 1.5% month-over-month.
The profit side follows a different curve. Consensus estimates are for adjusted EPS of $0.43–$0.45 and revenue of $27.8–$28.1 billion (Zacks: $0.44 / $27.8 billion).
billion USD; AlphaStreet aggregates estimates from 24 analysts at $0.45 / $28.11 billion, with an EPS forecast range of $0.30–$0.70, compared to the same period last year's
$0.50 down 10%–14%. The 30-day consensus was lowered by 3 cents; looking at a 90-day window, the EPS consensus has been revised down from $0.55.
18.2% (AlphaStreet); the original author recorded 18 downward revisions. The lesson from the last quarter is still fresh: adjusted EPS for Q2 was $0.33, below consensus.
34%, the largest miss in the past eight quarters. The options market implies a bidirectional volatility of 7.43% for this earnings report, higher than the average absolute volatility of 5.95% over the past four earnings releases.
Profit margin: The real battlefield
The issue in the second quarter was "selling more but earning less per unit": the automotive gross margin, excluding regulatory credits, fell from 19.2% to 16.3%, and the energy gross margin halved from 39.5% to
20.4% (the latter includes a $240 million historical warranty adjustment and the disappearance of tariff gains). Management explained that, excluding approximately $230 million
After one-time factors of hundreds of millions of dollars, the automotive gross margin remained roughly flat quarter-over-quarter; Morgan Stanley expects the automotive gross margin for the third quarter, excluding credits, to be 16.4%.
More striking is the operating profit margin: just 1.4% in the second quarter, yielding only about 1.4 cents in operating profit for every dollar of revenue. According to Business Quant data as of June 2026
As of the同业 data on the 30th, the corresponding figures were: Toyota 7.86%, Honda 8.76%, General Motors 3.04%, Ford 1.32%, Ferrari 31.22%.
Comparing Tesla with Ford, General Motors, and Toyota leads to two conclusions—Tesla still leads in gross margin but has fallen behind Toyota in operating margin; yet the market clearly isn’t pricing it like a traditional automaker. His evidence is the equity curve: the other three automakers can only pay employees with operating cash flow and have almost no ability to raise capital without diluting their stock price. As a result, Tesla’s path of equity expansion is “radically different,” allowing it to raise equity capital during periods of high stock prices and largely avoid long-term debt—it remains the only automaker with cash and short-term investments significantly exceeding long-term debt, giving it room to iterate and experiment repeatedly.
It should be noted that Toyota's own operating profit margin is also declining: 10.0% for FY2025, with sources projecting 6.3% to 7.9% for FY2026.
The discrepancy is primarily due to U.S. tariffs and the Middle East situation. While Tesla is "losing to Toyota," Toyota is also retreating.
Imagination Checklist: FSD, Robotaxi, Energy Storage, and a $25 Billion Bill
The author lists three unrealized high-margin businesses: FSD subscription (which he compares to Apple’s App Store model, but cautions that the entry barrier is far higher than that of carrier-subsidized phones), Robotaxi
Scaling (he believes the real risk is production bottlenecks—"spending one more hour making this means one less hour making another model") and energy storage (he assesses it as more about revenue growth than high margins, and potentially consuming the lithium supply needed for vehicles).
The latest update shows that FSD paid users have reached 1.48 million, a 56% year-over-year increase, with Morgan Stanley estimating a North American option rate of 55%. Regarding Robotaxi, in September, Cybercab
After deployment, the Austin fleet grew eightfold to over 300 vehicles within 30 days, with cumulative autonomous miles exceeding 1 million (approximately 380,000 miles at the time of the Q2 earnings report), and the network expanded from 3 cities to 7.
Next stop, Dallas.
Costs rise in tandem: Capital expenditure guidance for 2026 exceeds $25 billion, with the company securing up to $30 billion in debt financing; Q2 capital expenditures doubled year-over-year to $5.79 billion.
Billion USD, free cash flow turned to approximately -1.1 billion USD, capital expenditures for the first half of the year amounted to 8.28 billion USD.
Billions of dollars, more than doubling year-over-year. Musk has dubbed the current phase "the fastest industrial-scale expansion since World War II." Another regulatory factor hanging over the earnings report: NHTSA has requested Tesla to provide information regarding the pedal-free Cybercab.
How to make a sworn statement certifying compliance with federal security standards, by October 30, the ninth day after the conference call.
SpaceX merger: The ultimate engine of narrative—and the most uncertain piece
The original author openly expresses his judgment: "I believe this (merger) will happen." The logic is: the Roadster demonstration itself showcased the synergy between the two companies, and the thrusters could be used in future Mars rovers; Starlink
Has become a key asset in the U.S. defense system during recent military operations; if the two merge, Tesla would resemble an “early version of General Electric”—an industrial and defense conglomerate too big to fail. He will also introduce Optimus
Include in the same narrative.
He is not the only one betting on the market. In a report dated October 14–15, Barclays analyst Dan Levy suggested that two companies may be positioning themselves ahead of Tesla’s annual shareholder meeting, which by law must be held no later than
Announce the merger before December 6, with SpaceX acquiring Tesla in an all-stock deal, where the value lies not in traditional automotive synergies but in AI vertical integration—leveraging Tesla's
Robotaxi, Optimus, and Grok from SpaceX’s xAI, bundled with Macrohard. Wedbush’s Dan Ives says
The probability of completing the merger before 2027 exceeds 80%. The contract probability on Kalshi for “merger agreement announced before March 2027” rose from 29% on October 14 to October
56% on the morning of the 16th.
To date, neither company has officially announced any merger plans; the predicted market price reflects trader pricing rather than the existence of an agreement, and Barclays' report consists of analyst scenario projections rather than company disclosures. Meanwhile, Polymarket
The pricing for "completion of the merger by the end of 2026" is approximately 24%, while Kalshi's alternative estimate is approximately
19% indicates that market disagreement over "near-term implementation" far exceeds disagreement over "long-term occurrence." The two existing substantive connections are: SpaceX acquired xAI in February this year, and Tesla invested $20 million in March.
Acquired less than 1% of SpaceX for billions of dollars; both parties are jointly advancing the Terafab semiconductor project; Ostian estimates approximately $1 billion in GAAP net profit for the second quarter from its holdings
Book gains on SpaceX shares. Even with progress, the obstacles are equally concrete: two shareholder votes, antitrust review, and national security review triggered by a defense contractor acquiring an automaker with significant exposure to China.
How institutions view it, and a "more moderate" alternative
On target prices, sell-side analysts show little divergence but lean conservative: Investing.com aggregates a 12-month average target price of $397.83 from 38 analysts, with JPMorgan
$415 (Neutral) from Morgan Stanley, $400 (Neutral) from Goldman Sachs, $360 (Neutral) from UBS.
Morgan Stanley’s Andrew Percoco holds a constructive view, citing demand resilience, potential upside to demand and gross margins if FSD gains broader approval, and an undervalued energy business, but remains cautious on Optimus.
The commercialization timeline remains cautious, emphasizing cash burn and valuation constraints on near-term upside. He believes in Robotaxi
The attitude that best captures the current divide is: Scaling up is good, but "utilization, security performance, and unit economics are the next challenges."
Analysis indicates that this quarter will not be strong and may even fall below the already revised EPS expectations; the company needs a new deliverable product to fill the gap left by the Cybertruck; with SpaceX
Listed and with merger expectations rising, Tesla’s proposed alternative is the Baron Partners Fund (BPTRX), which provides approximately 46% combined exposure to Tesla and SpaceX.
Regarding the exposure, Ron Baron stated that he will hold both positions long-term, with lower volatility than holding either one individually; the author also discloses having long positions in BPTRX and TM for themselves and their clients, and this recommendation should be considered as having a conflict of interest.
On a valuation basis, there is another set of inverse figures: according to Ostian’s calculations, Tesla’s forward non-GAAP P/E ratio is approximately 215x (industry median is about 15x), and its forward PEG is 11.5 (industry
1.25), even using the 2027 estimated value, it still amounts to approximately 174 times; the forward P/E ratio for 2027 is 207.84 times, and only a handful of analysts dare to predict 2028.
Profit trajectory after a year—those bold enough to predict offer a forward P/E ratio of approximately 18.87 for 2032, implying an 11-fold increase in profits over six years.
Times. This is precisely the essence of this earnings report: the market is still paying for imagination, and the report released on October 21 tested the distance between imagination and cash flow.