Tesla is expected to announce a major boost in its next earnings call, fueled by its best-ever quarter in vehicle deliveries and growing demand for Full Self-Driving (FSD) subscriptions. The company’s delivery volume rose sharply quarter-over-quarter, improving fixed-cost absorption and pushing automotive gross margins higher.
The rollout of the FSD V14-lite software update to vehicles equipped with Hardware 3 has accelerated sales, especially in expanding markets like China and Europe where increased regulatory approvals are unlocking new revenue. This has helped raise the number of active FSD subscribers to over 1.28 million, marking significant year-over-year growth. The surge in subscriptions also enhances Tesla’s recurring revenue stream and supports stronger resale values in the used electric vehicle market.
Energy generation and storage segments also contributed to the financial outlook, delivering solid segment margins and accounting for an increasing share of Tesla’s revenue. With energy revenues growing alongside automotive sales, Tesla’s overall margin profile is expected to improve. If subscription growth sustains and any deferred FSD revenue is recognized, the company’s automotive margin could approach 24%, a notable rise over previous periods. Otherwise, margins might moderate to around 22.5% with corresponding impacts on reported earnings per share.
Together, these factors position Tesla to report dual gains in both revenue and profitability, driven by a combination of robust vehicle deliveries, rapidly scaling FSD adoption, and expanding energy business contributions.