TSLA · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

Tesla, Inc. · 2026-10-22 · Importance 54 · Surprise 40

Total gross profit increased $2.88 billion to $14.97 billion for the first nine months of 2026, and total gross margin expanded from 17.3% to 19.0%. Automotive and Services and Other gross margin increased from 15.4% to 17.7% for the first nine months, supported by higher automotive sales gross margin and improved services and other gross margin. Automotive gross margin increased to 18.7% from 16.9%, despite a $812 million, or 56%, decline in regulatory-credit revenue, because of sales and cost changes, favorable tariff and warranty adjustments and foreign-exchange effects. Energy generation and storage gross margin declined slightly to 30.2% from 30.3% for the first nine months, while third-quarter margin increased to 33.1% from 31.4% because of tariff refunds, lower Megapack unit costs and deployment-related mix changes.

Key facts

• Cost of automotive sales revenue was $16,570 million for the three months ended September 30, 2026, a decrease of $795 million, or 5%, compared to the three months ended September 30, 2025. source
• Total gross profit for the three months ended September 30, 2026 was $5,494 million and total gross margin was 19.6%. source
• Energy generation and storage cost of revenue decreased $415 million, or 18%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. source
• Gross margin for total automotive increased from 17.0% to 18.5% in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. source