Tesla’s profits decline despite record revenues

Tesla saw its profits decline despite reporting record quarterly revenue after US buyers rushed to take up a key tax credit on electric vehicle purchases before it expired last month.

The company said revenues for the three months to the end of September reached a record $28bn (£21bn), up 12% on the same period last year.

But the company’s profits fell 37% over the same period, partly due to additional costs associated with tariffs and research.

The results come before shareholders vote in November on a new pay package for CEO Elon Musk, which could be worth up to $1 trillion.

Tesla shares fell by about 3.7% in extended trading after the results were announced.

The company’s stock market valuation of roughly $1.4 trillion has been driven in recent months by investors’ confidence in Musk’s ability to realize his ambitions to transform Tesla into a global leader in artificial intelligence (AI) and robotics.

But vehicle sales currently remain the main source of income while these new products are developed.

Like other automakers around the world, Tesla faces stiff competition from Chinese rivals like BYD.