Shares in Tesla (TSLA) stock slipped on Thursday after the company’s Q3 earnings report showed quarterly profits missed Wall Street forecasts. The EV giant’s Q3 earnings showed the company sold more vehicles than in Q3 2024, but profitability collapsed. The company reported adjusted earnings of 50 cents per share in the period, missing the average Wall Street estimate of 54 cents a share.
Lower EV prices and higher operating costs tied to restructuring and AI investments dented the bottom line. The automaker reduced prices and offered low-interest loans to stimulate demand as shoppers rushed to use a federal EV tax credit before it expired on September 30. Additionally, lower EV prices and higher operating costs tied to restructuring and AI investments dented the bottom line
Tesla’s Q3 earnings came as clean air credit revenue declined after Donald Trump and Republicans weakened environmental regulations. These credits had historically boosted profit significantly, thus having a negative impact on Tesla’s latest quarterly report. TSLA stock weakness also reflected market share loss, dropping to 41% in the U.S. from 48% a year earlier.
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Furthermore, Tesla stock looks set to break down below a pennant pattern in Thursday’s trading session, suggesting waning bullish momentum and the potential for a near-term pullback. Tesla hit a yearly high earlier this month, but is now up just 2% in 30 days, with a decline in the past weeks. Should the drop post-earnings continue, TSLA shares may drop to key support levels around $360 and $292. Even further, a more significant retracement may spark a decline to the $267 level. While this is a bearish case, investors may also see that point as a solid entry point to invest before an anticipated rebound.