Elon Musk responded to the pressing questions about Tesla's future with three business segments.
During Tesla's Q3 earnings conference call, few asked for explanations about its past performance. Over 90% of the questions were about Tesla's future.
On October 23, Tesla released its Q3 2025 earnings report. Tesla's total revenue in Q3 increased by 12% year-on-year to $28.1 billion, and its free cash flow reached $4 billion. The company set new records for both revenue and free cash flow this quarter. In terms of deliveries, both the electric vehicle and energy storage businesses hit new highs. Tesla produced approximately 447,000 pure electric vehicles globally and delivered 497,000 vehicles in this quarter. Meanwhile, the installed capacity of Tesla's energy storage products reached 12.5 GWh. The production capacity release of Tesla's Shanghai energy storage gigafactory continued to boost the business growth.
However, on the day after the earnings report was released, Tesla's stock price dropped by over 4% before the market opened. On one hand, the market generally believes that Tesla's performance in the automotive business in Q3 was a rebound before the expiration of the US subsidy policy and is not sustainable. On the other hand, Tesla's profit in Q3 did not increase significantly like its revenue but instead declined significantly.
Tesla must present the plans and progress of its potential businesses to regain market confidence, which is what Tesla founder Elon Musk did during the Q3 conference call.
Autopilot and Robotaxi: Function Evolution, Scale Expansion, and Mass Production Imminent
Autopilot remained the most - discussed topic during this conference call. Musk pointed out in his speech that Tesla "is at a critical inflection point of bringing artificial intelligence into the real world" and claimed that Tesla is "the leader in real - world artificial intelligence."
As of October 2025, the cumulative driving mileage of Tesla's FSD system has reached 6 billion miles. Ashok Elluswamy, the head of Tesla's Autopilot, introduced that in Austin, Texas, the Robotaxi fleet has completed over 250,000 miles of operations without a safety driver. In the Bay Area, the cumulative driving mileage has exceeded 1 million miles. User feedback shows that the safety of the system in complex urban road environments has been significantly improved.
Musk revealed that Tesla's Robotaxi business is currently operating in Austin and the Bay Area and plans to expand to 8 - 10 major metropolitan areas such as Nevada, Florida, and Arizona by the end of the year. The operating area in Austin has expanded three times in the past few months.
He said, "In a few months, we expect to completely remove safety drivers in some areas of Austin." However, Musk also emphasized that Tesla will take an "extremely cautious" approach. "Even a single accident could become global news." Therefore, when entering new cities, the company will proactively equip safety drivers for early verification and usually fully lift the restriction after three months of operation.
At the software level, Tesla has pushed the 14th version of FSD in the US. The new version of FSD can make more natural driving judgments and is significantly optimized in scenarios such as lane - changing, obstacle avoidance, and traffic light recognition. Tesla CFO Ashok Elluswamy added that once the V14 version series is fully completed, the team plans to launch the FSD V14 Lite version for the HW3 platform to ensure that old car owners can also have an upgrade experience. In addition, Musk mentioned that the FSD plans to add an "inference function" in subsequent versions, enabling the vehicle to think and make decisions independently, such as automatically selecting parking spaces, predicting road congestion, or adjusting routes in advance.
In the hardware field, Tesla's AI computing power has achieved a new - generation leap. Musk introduced that Tesla's newly self - developed AI5 chip has certain indicators approximately 40 times higher than those of the AI4 chip and is manufactured by TSMC and Samsung in Arizona and Texas respectively. The chip removes the traditional GPU and image signal processing modules, further improving energy efficiency. "The per - watt performance of AI5 is two to three times that of AI4, and the per - dollar performance has increased by about ten times."
In terms of product plans, Musk confirmed that the Cyber Cab will start production in the second quarter of 2026. The Cyber Cab "is completely designed for autopilot, without a steering wheel and pedals" and aims for an extremely low unit - mileage cost. "This car is optimized for a comfortable driving experience. It doesn't need to pursue speeds over 85 or 90 miles per hour but always aims for a smooth drive, which is the characteristic of the Cyber Cab." Musk is confident about this product. "I think the market demand may be extremely astonishing."
Humanoid Robot Optimus: Extremely Difficult, Challenging a One - Million - Unit Production Line
At the beginning of the conference call, Musk emphasized that Tesla's humanoid robot project, Optimus, will be "the product with the greatest potential and the highest challenges in the company's history."
One of the difficulties of this project lies in the technology itself. He pointed out that manufacturing a robot with human dexterity is an extremely complex engineering task. "The more you study the human hand, the more you realize how amazing it is... The five fingers, joint angles, and force distribution of the human hand all have their reasons for being designed this way. The hand and forearm of Optimus are a very difficult engineering challenge. From an electromechanical perspective, the forearm and hand are more difficult than the rest of the robot. But to have a useful general - purpose robot, it really needs to be done."
Currently, the Optimus robot can operate around the clock inside Tesla's headquarters in Palo Alto, California. It can walk independently and guide visitors. Musk revealed that the company will showcase the Optimus V3 prototype in the first quarter of 2026 (around February - March). "This will be a robot that is almost indistinguishable from a real person, like a person wearing a robot suit."
The supply chain is another arduous challenge. Tesla hopes to launch a production line with an annual output of 1 million Optimus robots by the end of next year. Musk admitted that this goal is extremely difficult: "There is simply no supply chain for humanoid robots." Therefore, to manufacture it, Tesla actually has to conduct very vertical integration and go deep into the supply chain to manufacture parts. "But it will take some time to reach an annual production speed of 1 million units because it will be limited by the slowest, clumsiest, and most unlucky part among the 10,000 unique components."
Vaibhav Tanya mentioned that most of the R & D and manufacturing teams for Optimus are from Tesla's automotive department. Many engineers who once designed drive units are now designing robot actuators. The team holds weekly engineering and manufacturing reviews. He recalled: "Optimus 2 was almost impossible to manufacture, but the 2.5 version can already perform human - like movement demonstrations. Many people thought it was a real person when they saw it."
Musk emphasized that Tesla's unique advantage in the robot field is that it has real - world artificial intelligence, excellent electrical and mechanical engineering capabilities, and large - scale production capabilities, which others may not have all at once. Optimus will directly use the AI system accumulated by Tesla in FSD, which gives it a "natural lead" in environmental understanding and motion control.
He also proposed a long - term goal - to achieve "sustainable abundance." Musk believes that when robots can undertake repetitive labor, humans will be able to enjoy a higher - quality life. "In the future, Optimus can become a surgeon, allowing everyone to enjoy the best medical services."
Energy Storage Business: Double the Energy Utilization Rate in the US Without Building New Power Plants
Notably, the content about the energy storage business took up a significant portion of this conference call. Musk pointed out in his opening speech that Tesla has had a huge impact in the energy field, especially in battery energy storage. "Through the extensive deployment of Powerwall and Megapack, we are significantly enhancing the power supply capacity of the power grid," he said. "Tesla's battery packs have the potential to significantly increase the annual energy output of any power grid, whether in the US or other regions."
Powerwall is a home battery energy storage system launched by Tesla. It can store the electricity generated by solar panels and can also be charged from the grid when the grid electricity price is low. Then, it can supply power to household electrical appliances during peak hours, power outages, or when users want to go off - grid. Megapack is an ultra - large - scale electrochemical commercial energy storage system mainly used for large - scale public utility projects and commercial projects. It can store energy when the power generation is high and release energy when the grid needs it, providing reliable support for the power grid.
Musk gave an example. The current continuous power generation capacity in the US is about 1 terawatt, while the average electricity load is only 0.5 terawatt. "If we use battery energy storage to balance the day - night electricity consumption difference, the energy utilization rate in the US can be doubled even without building new power plants." Musk emphasized that compared with the long construction cycle of power plants, the energy storage system can achieve the same power supply effect more quickly.
In terms of products, Musk introduced the latest Megapack 3 and the upcoming Megapack 4. He revealed that the new - generation Megapack will integrate multiple functions previously undertaken by substations and can directly output 35 kV high - voltage current. "This means that there is no need to build additional high - voltage substation facilities, and both the deployment cost and cycle will be significantly reduced."
Vaibhav Tanya added that Tesla's energy storage business set historical records in multiple dimensions in Q3, including deployment volume, gross profit, and profit margin. However, since the batteries used in this business mainly come from China, "under the current trade environment, the energy storage products are under relatively greater tariff pressure." He said that the company is increasing the supply to non - US markets through its Shanghai gigafactory to disperse the impact of tariffs.
Mike Snyder, the head of the energy business, said during the Q&A session that the market demand for Megapack and Powerwall is expected to continue to grow at a high level until the first half of 2026, especially against the background of the rapid expansion of AI data centers. "More and more enterprise customers hope to use Megapack to cope with the increasing grid load and improve power supply stability."
He also revealed that Tesla has started production of a new residential solar panel project at its Buffalo, New York factory. This new solar leasing product is expected to start shipping in the first quarter of 2026. "This product has a simple appearance and leading - level performance in the industry, which also reflects Tesla's long - term investment in US manufacturing." Driven by policy changes, the US residential solar market is experiencing a new round of growth.
Vaibhav Tanya said in the performance summary that despite the unfavorable factors of tariffs and raw material price fluctuations, the profitability of the energy storage business is still continuously improving. "The gross profit of the energy department has reached a new high, and we are making arrangements for the next stage of growth." He also pointed out that the company's capital expenditure in 2026 will increase significantly, and part of it will be used for AI chip R & D and large - scale investment in energy products.
This article is from the WeChat official account "Power Plant", author: Zhai Fangxue. Republished by 36Kr with permission.