Investor's Corner
Tesla releases Q2 results: Sets quarterly production record
This is a quick cut of the main items from the shareholder letter outlining Tesla Q2 financial results:
Summary
- Completed Model 3 design phase
- Increased automotive gross margin on both Model S and Model X
- Exited Q2 consistently producing nearly 2,000 vehicles/week
- Production and demand on track to support 50,000 deliveries in 2H 2016
- Merger agreement to acquire SolarCity signed, subject to shareholder vote
Production
“In Q2, we delivered 14,402 new vehicles consisting of 9,764 Model S and 4,638 Model X, which was slightly higher than what we stated in our July announcement. Model S remains the market share leader in North America and Europe among all comparably priced four-door sedans, and Model X is quickly gaining ground against similarly priced SUVs in all regions.”
“We exited Q2 consistently producing nearly 2,000 vehicles per week and our total Q2 production of 18,345 vehicles constituted a new quarterly production record, up 18% from Q1 and up 43% from Q2 last year.”
These numbers are in line with the 14,370 new vehicles deliveries and the “just under 2,000 vehicles per week” reported in the July 3rd release. So nothing new here.
One good number is that “production hours per vehicle also declined throughout the quarter for both cars”, indicating the ability to continue to produce more cars per hour.
Gigafactory
“Gigafactory construction remains on target to support volume production of Model 3 in late 2017, and we recently accelerated construction to reach a rate of 35 GWh/year of cell production in 2018. This will allow us to meet the needs of our accelerated Model 3 production plan.”
Notice that the 35GWh/year of cell production is currently the total worldwide output.
Earnings
“Our Q2 GAAP net loss was $293 million or a $2.09 loss per share on 140 million basic shares, while our non-GAAP net loss was $150 million, or a $1.06 loss per basic share. Both figures include a $0.05 per basic share loss related mostly to losses from foreign currency transactions.”
According to MarketWatch, “Analysts polled by FactSet [expected] Tesla to report an adjusted loss of 59 cents a share in the second quarter. […] Estimize, which crowdsources estimates from analysts, fund managers, and academics, expected Tesla to report a loss of 54 cents a share, based on 379 estimates.”.
Loss is higher than anticipated. This number scared a few traders that bid the stock lower to 217 in after hours trading, but the stock quickly retraced back to 228, higher than the daily close. For a company like Tesla, where the price is based on future expectations, the earning numbers are really not what counts.
Revenue
Total Q2 GAAP revenue was $1.3 billion, while non-GAAP revenue was $1.6 billion for the quarter, up 31% from a year ago. Total Q2 gross margin was 21.6% on a GAAP basis and 20.8% on a non-GAAP basis.
Also according to MarketWatch, “FactSet analysts [were] expecting sales to reach $1.63 billion in the quarter, compared with $1.20 billion in the second quarter of 2015. […] Estimize [was] expecting sales of $1.55 billion.”
Revenue is pretty much matching expectations, and this will be seen positively by Wall Street.
Gross Margins
“Q2 Automotive gross margin was 23.1% on a GAAP basis. On a non-GAAP basis, gross margin excluding ZEV credits increased over 200 basis points from Q1 to 21.9%. We recognized an insignificant amount of ZEV credit revenue in Q2. The strong sequential gross margin increase was primarily due to improved manufacturing for Model X and favorable pricing for Model S. Our warranty accrual rates on new vehicles were generally consistent with Q1.”
Another good number that Wall Street likes a lot: increasing gross margins!
“We delivered fewer cars in Q2 than originally planned as a result of our steep production ramp, which resulted in almost half of Q2 production occurring in the final four weeks of the quarter. Given inflection points in the production ramp and firm shipping cutoffs, shifting production by even a short period of time had a disproportionate impact on the number of cars that were delivered by quarter end.”
This is also nothing new as it was originally disclosed in the July 3rd release.
Services
“Q2 Services and other revenue was $88 million, up 15% from a year ago but down sequentially. The decline was primarily due to having fewer pre-owned cars to sell because of the need to use them to expand our service loaner fleet. Q2 Service and other gross margin was 2.5%, down from 4.7% in Q1, but generally in line with our expectations.”
Stores
“We are also accelerating store openings and plan to add a new retail location every four days on average during the remainder of Q3 and through Q4. We are adding stores in new population-dense markets like Taipei, Seoul, and Mexico City, while also adding stores in our most mature markets like California.”
That is about 45 new stores by the end of the year.
Outlook
“Production and demand are on track to support deliveries of approximately 50,000 new Model S and Model X vehicles during the second half of 2016.”
Given the Q1 and Q2 reported deliveries, the 2016 deliveries are now slated to be around 79,000, pretty close to the bottom of the previously reported 80,000 to 90,000 range.
“Vehicle production efficiency is improving rapidly and we are now increasing our weekly production rate even further. Barring any further supply constraints, we plan to exit Q3 with a steady production rate of 2,200 vehicles per week, and plan to increase production to 2,400 vehicles per week in Q4.”
“Despite the disciplined pace of capital spending in the first half of this year, we still expect to invest about $2.25 billion in capital expenditures in 2016, in support of our accelerated production plan for Model 3.”
What is not there
Surprisingly there is nothing in the letter about the pending $2.6 billion SolarCity acquisition.
Full Q2 Results
From the Tesla Q2 Shareholder Letter.
Initial Market Reaction
$TSLA stock immediately dropped to $217 right after the close of regular market trading, but after about an hour of extended hours trading it was back to the previous daily close of $225.30, indicating that we should not expect much fireworks when the stock market reopens on Thursday.
Wall Street seems relieved that the weekly production numbers are in line with expectations, and that the corresponding “production ramp” is still in play.
Elon Musk
Elon Musk and Trump are closer than ever, and Tesla could be the big winner
Elon Musk sat beside Trump as AI leaders signed a voluntary White House safety accord.
Elon Musk had the seat right next to President Donald Trump on Tuesday as the White House hosted the leaders of America’s biggest artificial intelligence companies for a lunch that ended with a voluntary industry accord on AI safety.
A seating chart Trump posted on Truth Social placed Musk at the president’s left in the East Room, with Nvidia CEO Jensen Huang on his right, according to an Associated Press reporter. Anthropic CEO Dario Amodei, OpenAI President Greg Brockman, Meta’s Mark Zuckerberg, Google’s Sundar Pichai, Microsoft’s Satya Nadella and Amazon founder Jeff Bezos also attended, along with Vice President JD Vance and House Speaker Mike Johnson.
🚨 Elon Musk is currently speaking to the media alongside President Trump after a meeting with AI Leaders in Washington today
Trump says AI is now being called “Super Intelligence” or SI pic.twitter.com/woJJqUVP9B
— TESLARATI (@Teslarati) September 29, 2026
After the lunch, Trump told reporters outside the West Wing that the executives had signed “The White House Accord on Superintelligence: A Joint Commitment on Frontier SI Responsibilities.” Johnson described it as a voluntary statement of principles built on “robust internal controls and layers of internal and external review,” while Zuckerberg said company boards would independently review reports from outside auditors. Trump called the document “morally binding,” said he would name a new AI czar within days, and signed an executive order formally renaming artificial intelligence “super intelligence,” CNBC reported.
Musk was not in the room for Tesla alone. Since SpaceX absorbed xAI, he runs the company behind Grok and one of the largest AI training operations anywhere. On September 25, he said another 220,000 Nvidia GB300 chips would come online at Colossus 2 within a week, with more expected in November and December.
“I think it is worth highlighting the positive benefits of A.I. … S.I., pardon me.”
“Thank you.”@elonmusk catches his own slip after calling the technology “A.I.” while speaking alongside President Trump and other tech leaders, quickly correcting himself to “super… pic.twitter.com/fH7CFileNb
— Fox News (@FoxNews) September 29, 2026
SpaceX confirms third massive compute deal at Colossus data center
Musk also used the trip to restate his energy ambitions. “SpaceX is aiming together with Tesla to do 200 gigawatts of solar production per year,” he said at an event in Washington. It is the same combined target he laid out that feeds directly into Terafab, the Tesla and SpaceX chip venture that will need enormous amounts of power.
The showing between Musk and Trump has come a long way, since the two had the very public split in mid 2025 after Musk opposed the “Big Beautiful Bill” and left DOGE. They reconciled at Charlie Kirk’s memorial that September, and Trump later called their relationship “good”. Since then, Musk has joined Trump’s China delegation in May and attended last week’s White House state dinner for Chinese President Xi Jinping.
For Tesla, that access to government official could pay dividends. As Teslarati noted in January, federal autonomy rules, NHTSA oversight and a single national standard for driverless vehicles all run through an administration Musk can more easily reach directly as Tesla works to scale Robotaxi and Cybercab beyond Texas.
Tesla (NASDAQ: TSLA) showrooms have been picked clean ahead of the end of the third quarter of the year, as demand looks to be strong and delivery estimates for new vehicles are pushed into late 2026 and early 2027.
Tesla appears to have sold out of many of its Model 3 and Model Y trim levels in the United States, as only the Model Y RWD and Model Y All-Wheel-Drive are available for delivery before the end of the year.
Additionally, many showrooms are either completely empty or void of all but just one demo unit within the buildings themselves in an effort to bolster what could be one of Tesla’s best quarters in vehicle deliveries in recent memory.
I’m at Tesla right now and when I walked into their showroom I was shocked to see it basically empty.
I asked one of the people working there where all of the cars are “Gone – it’s the end of the quarter and we’ve sold out of everything… including the display vehicles”So… pic.twitter.com/rN7s3gE6sJ
— Devin Olsen (@DevinOlsenn) September 25, 2026
All the cars are gone from Tesla Century City!
All they have is Model Y L, a self-driving video playing on the background. I guess the best product is no product. Either that or they just sold the showroom cars. pic.twitter.com/mzCjWaXwww
— Whole Mars Catalog (@wholemars) September 26, 2026
Show room is empty. I asked and they have sold the demo cars too. Delivery numbers better be outstanding! pic.twitter.com/jq5N28Q6tZ
— Electric Brawl (@3lectricBrawl) September 22, 2026
Additionally, when I spoke to the guys at Tesla Mechanicsburg two weeks ago, when I returned the Model Y L, their third hauler of the week had just arrived, and every vehicle on it, along with every vehicle in their delivery lot, was accounted for and had a name attached to it for delivery.
Talking to the guys at the Mechanicsburg showroom on Friday, they couldn’t believe they had ANOTHER hauler coming in of cars for delivery—and each was accounted for
No car just sitting in inventory. They’re expecting a BIG quarter, and this is more than just the Y L https://t.co/ce801GkKVv
— TESLARATI (@Teslarati) September 21, 2026
Tesla saw a 25 percent increase in deliveries in Q2 compared to the same quarter the year before. The vast majority of the 480,126 units it delivered, 467,762 vehicles to be exact, were the Model 3 and Model Y.
In Q3 2025, Tesla delivered 497,099 vehicles, once again a figure that was dominated by the company’s two mass-market vehicles. Analysts have unusually wide predictions for this quarter, likely because so many firms missed the Q2 delivery figure by such a substantial margin; Wall Street predicted 408,000 cars, while Tesla delivered 480,000.
Goldman Sachs has Tesla slotted for 435,000 deliveries in Q3, while JPMorgan said it anticipates 482,000. The median guess is about 449,000 deliveries for Q3.
Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.
Elon Musk
SpaceX turned a heralding moment for Starship into its greatest
Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.
SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.
The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.
Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.
Splashdown confirmed. Congratulations to the entire SpaceX team on the first orbital flight of Starship! pic.twitter.com/urjmiwnvNl
— SpaceX (@SpaceX) September 28, 2026
That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.
The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.
SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.
Starship’s 14th flight is set to launch on Monday, Sept 28. The 75-minute launch window opens at 7:15 a.m. CT. Live coverage of the mission starts ~35 minutes before launch → https://t.co/uQKQvgaTmJ
— SpaceX (@SpaceX) September 27, 2026
Elon Musk and Trump are closer than ever, and Tesla could be the big winner
Tesla Roadster’s new patent preps white-knuckle speeds, keeping it grounded
