Tesla has revised its long-term vehicle sales target, aiming to deliver 5 million cars annually by 2030, a significant reduction from CEO Elon Musk’s previous goal of 20 million units. The adjustment reflects Tesla’s strategic shift from its traditional electric vehicle (EV) business toward robotics and artificial intelligence (AI) applications.
Musk outlined the updated target during Tesla’s third-quarter earnings presentation on Wednesday, noting the company is expanding manufacturing capacity to support the revised goal. Tesla delivered 1.6 million vehicles in 2025, up from 1.5 million the prior year. For the third quarter, Tesla reported delivering 486,532 vehicles, slightly above analyst expectations but down 2 percent compared with the same period last year.
Adjusted net income declined 4 percent year-on-year to $1.7 billion in the quarter, marginally exceeding Wall Street forecasts of $1.6 billion. GAAP net income, which includes stock-based compensation and investment fluctuations, fell by 44 percent to $787 million. Tesla’s automotive profit margin improved to 18 percent, excluding regulatory credits, while cost of goods sold decreased from the previous quarter. Revenue remained flat at $28 billion, consistent with analyst predictions.
The company’s shares dropped 3 percent in after-hours trading following the earnings release. Tesla faces a recent decline in EV sales, with increased European demand due to rising fuel costs unable to offset the reduction of U.S. government incentives.
Amid financial disclosures, Musk announced that Tesla and SpaceX, his aerospace firm, have formed special committees to explore a potential merger between the two companies, which operate across diverse sectors including rockets, satellites, social media, robotics, and automotive manufacturing. Musk described the merger idea as “a good idea” but declined to offer further details during the earnings call.
Earlier this month, Musk showcased a new “flying” sports car, the Roadster, featuring cold-gas thrusters developed by SpaceX. The two companies are also collaborating on a high-capacity chip fabrication facility ("Terafab") in Austin, Texas, designed to support Tesla’s autonomous vehicles, robotics, and data centers for AI applications.
Tesla has shifted focus away from certain legacy vehicle models, retiring its X SUV and S luxury sedan to prioritize AI-powered humanoid robots called Optimus, self-driving Cyberbacs, and an electric Semi truck. Musk anticipates delivering Optimus robots to external customers starting at the end of 2027, though he cautioned that scaling production will be gradual. Cybercabs, Tesla’s autonomous robotaxi fleet, are expected to see broader deployment by the end of 2026, despite currently operating only limited pilot programs in Texas and California.
The adoption of Tesla’s supervised Full Self-Driving software surged in North America, with more than 75 percent of new vehicles sold equipped with the system, contributing to revenue growth.
Tesla’s capital expenditure rose to $4.7 billion in the quarter but remained below expectations and down from the previous quarter’s $5.7 billion. The company revised its full-year capital spending forecast downward to approximately $20 billion from $25 billion, citing improved capital efficiency. Musk has emphasized the need for increased investment to remain competitive with major technology firms projected to spend heavily on AI development in coming years, fueling speculation about the SpaceX merger’s role in future financing.
Ahead of Tesla’s annual shareholder meeting scheduled for December 3, the company filed a proxy statement revealing Musk retains control of 19.8 percent of Tesla’s shares following a lengthy legal battle over a $56 billion stock award. Musk remains on track for a historic $11 billion compensation package but has yet to meet the performance milestones tied to Tesla’s market capitalization and sales growth. Tesla’s share price has declined 18 percent this year, leaving the company’s market value at approximately $1.45 trillion.