Tesla faces sharp profit drop as Musk touts robot future

Speaking on the earnings call, Musk argued that Tesla was well placed to absorb additional demand after General Motors and Ford scaled back their ambitious electric-vehicle roadmaps in 2025, redirecting investment toward higher-margin gasoline-powered SUVs and pickup trucks. He said the retrenchment by legacy automakers had created a "window" that Tesla intended to exploit with a broader lineup of EVs and, eventually, autonomous Cybercabs.

Musk devoted much of his prepared remarks to Optimus, the company's humanoid robot programme, which he described as potentially "the biggest product in history." He reiterated a forecast that Tesla could eventually produce millions of units annually, though he offered no new timeline for commercial deployment and conceded that technical hurdles remained around dexterity and battery life.

Optimus in the spotlight

The company also highlighted progress on its driver-assistance software, which underpins the planned robotaxi service. Tesla said it had expanded the geographic area in which its unsupervised system operates and had begun internal testing of a Cybercab vehicle that lacks a steering wheel or pedals. Regulators in several US states are still reviewing the safety case before any public launch.

Demand signals from Europe offered one bright spot. In Switzerland, industry group Auto Schweiz reported that Tesla sold 5,317 vehicles between January and September of the current year, a 17.9 percent increase over the same period in 2025, according to figures cited by the trade body. The data suggest that price reductions introduced earlier in the year are helping Tesla gain share in markets where Chinese competitors have also pushed hard.

Switzerland sales climb

Tesla left its full-year delivery guidance unchanged, implying a modest increase over 2025. Analysts had expected the company to lift the outlook given the absence of fresh incentives and the easing of supply-chain bottlenecks. Shares fell in late after-hours trading following the release.

The earnings come against a backdrop of political tension. Musk has publicly clashed with US President Donald Trump over trade policy and government subsidies, and the dispute has spilled into commentary from both men's supporters. On the call, Musk declined to address the feud directly but said Tesla would continue to lobby for policies that support domestic battery manufacturing.

Political backdrop

Investors are likely to focus on three metrics in the coming quarters: the trajectory of automotive gross margin, the rate at which Optimus moves from prototype to limited production, and the timing of any regulatory green light for the Cybercab service. Each will determine whether Tesla can justify the premium valuation that has long separated it from traditional automakers.