Tesla Shares Drop 4% on Profit Contraction and Lowered Capital Expenditure Outlook

Tesla shares dropped 4% in morning trading following a mixed Q3 2026 report featuring shrinking profitability and reduced guidance. While revenue was roughly flat at $28.05 billion, net income plunged 42.7% year-over-year to $787 million, and operating income fell from $1.62 billion to $718 million due to rising R&D costs. Management lowered full-year capital expenditure guidance from $25 billion to approximately $20 billion and trimmed delivery projections. Deliveries reached 486,532 vehicles amid battery constraints, while CEO Elon Musk indicated robotaxi revenue will not materialize until mid-to-late 2027.