Tesla Reports Q3 Earnings with Improved Free Cash Flow Amid High Valuation Concerns
Tesla (TSLA) reported a third quarter characterized by improved financial health, generating $1.5 billion in free cash flow following a period of negative cash flow in the previous quarter. The company saw an increase in gross margins to 18.85%, helping earnings exceed market expectations. Despite these automotive successes and reaching a milestone of 10 million vehicles shipped, Tesla's stock faced downward pressure as investors weigh its massive $1.5 trillion market capitalization against its high price-to-earnings ratio. The market is increasingly looking past traditional EV sales toward Tesla's long-term bets on autonomous driving, robotics, and energy storage. CEO Elon Musk emphasized the potential for robotaxis to dominate passenger miles and noted that Optimus robot production has commenced in California. However, analysts suggest that significant stock appreciation may depend on the successful scaling of these high-tech segments rather than core automotive results.