Tesla’s Q3 Earnings Report Drops As EV Competitors Make Gains

Good morning! Add this to the list of things that might scare you about artificial intelligence: losing your home. Real-estate scammers are using AI tools to commit deed theft, with the owner of a $137.5 million mansion saying they’re among the victims.

In today’s big story, Tesla reports earnings this afternoon with the focus back on its cars business.

What’s on deck:

But first, back to basics.

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The big story

Tesla the car company

Tesla has spent plenty of time discussing the future, but Wall Street wants to bring the EV giant back to the present.

Elon Musk’s company reports third-quarter earnings this afternoon, and analysts are focused on its core auto business. Business Insider’s Matthew Fox has a rundown on analysts’ expectations ahead of Tesla’s big day.

(To get real-time updates on Tesla’s earnings, be sure to check out our live blog here.)

Musk has spent time talking up everything but the cars his company currently sells. From robotaxis to autonomous vehicles and bartending bots, Tesla’s earnings calls have been heavily focused on what’s next instead of what’s now.

Tesla has good reason to avoid talking about the present. Its sales dropped for two straight quarters before righting the ship in Q3. It’ll now take a massive fourth quarter for its 2024 sales to eclipse last year’s figure.

Touting robotaxis and pitching the company as a leader in artificial intelligence has eased the pain (and helped the stock price), but even that has its limit. Tesla’s share price is still down more than 12% year-to-date after its flashy robotaxi event mostly fell flat with investors.

That’s why all eyes are back on its core business of selling cars, including the status of its industry-leading profit margins.

The report could signal the worst is behind Tesla … or is yet to come.

Tesla also needs to worry about what’s in its rearview mirror.

General Motors’ third-quarter earnings report topped estimates, leading to a nearly 10% surge in its stock. Part of its success included improved EV growth and profitability, writes BI’s Benjamin Zhang. GM now holds a 9.8% share of the US market, trailing only Tesla.

That comes during what’s been an overall tough time for the EV market. (But a good time for any who’s in the market for one!)

While the industry continues to grow, it’s at a much slower pace than a few years ago. Automakers have been forced to readjust their strategy around breaking into the market.

Overseas, things aren’t much better for Tesla. China, the world’s largest auto market and an area of growth for Tesla, has gotten increasingly competitive. Domestic rivals recently posted a record month for sales, and China’s EV giants stole the show at Europe’s largest auto show.

News brief

Top headlines

3 things in markets

1. Activist investor Starboard aired its grievances to Pfizer. The hedge fund, which reportedly has a $1 billion stake in the drug giant, recently presented a 74-page slideshow to Pfizer. Its complaints included a lack of R&D spend and a failure to deliver on its drug pipeline.
2. The bond market is scrambling to recalibrate itself. Bond yields are rising and prices are dropping as traders reset their expectations of future interest rate cuts. Strong economic data and a potential Trump win are believed to be the biggest factors preventing more rate cuts.
3. Inside Citadel Securities’ massive tech rebuild. Ken Griffin’s market maker is revamping the tech that powers its trades as it eyes growth. The goal is to prepare the firm for what lies ahead, Citadel Securities’ chief technology officer told BI.

3 things in tech

1. Amazon’s data center dream is battling “zombie” facilities, high costs, and labor shortages. Amazon plans to spend more than $100 billion expanding its data centers over the next decade. But the ambitious plan means it’s increasingly running into physical constraints. According to internal documents viewed by BI, electricity and labor headwinds are hampering the company’s long-term data center growth.
2. The plane-tracker who got on Elon Musk’s bad side says he’s lost faith in big social media. College student Jack Sweeney ran Threads accounts that tracked the movements of celebrities’ private jets — or at least he did until Monday, when Meta removed the accounts citing safety concerns. Sweeney told BI he thinks he was targeted by one of the public figures he’s tracking.
3. Disney and Apple are on the outs. Disney is no longer letting new customers sign up for Hulu or Disney+ via Apple’s App Store, which takes up to 15% of the monthly fees generated by Disney’s subscription services. Though the companies are still working together on some projects, the move points to a notable rift in the pair’s long-standing relationship.

3 things in business

1. Should America be more like Whoville? To bring down housing prices, America needs to break from its cookie-cutter tradition and build more weird homes. These five wacky home ideas could help create the housing we need.
2. The CDC said a deadly E. coli outbreak was linked to McDonald’s Quarter Pounders. Shares in the Golden Arches dropped more than 9% in extended trading on Tuesday following the announcement that one person died and 10 others were hospitalized. A total of 49 cases across 10 states have been reported thus far, but the extent of the outbreak is “likely much higher,” the CDC said.
3. Does anyone know what Disney’s post-Bob Iger plan is? The company’s announcement that it would name a new CEO in 2026 — far later than most expected — has left more questions than answers. The stakes are high: Disney flubbed Iger’s last exit plan so badly that it had to bring him back after less than two years.

In other news

What’s happening today

• Tesla, Boeing, IBM, Coca-Cola, and other companies report earnings.
• Harvey Weinstein appears in New York court on additional charges of sexual assault.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.