Tesla Inc. (TSLA.OQ): 3Q26 Deliveries Review

Tesla delivered 486.5k vehicles in 3Q26, beating consensus of 462k and our 465k estimate by ~5%. Our sense is upside came from Europe being stronger in September (e.g., France, Sweden) and China also outperforming, helped by cash discounts on in-stock cars; we think US demand remained supply constrained with Model Y and Model Y L wait times running into 2027. Production increased 3% QoQ to 464.4k, representing a drawdown of ~22k units of inventory which should be a tailwind for working capital. We now see 3Q auto gross margin ex-credits roughly flat QoQ at 16.2% (vs. 2Q's 16.3%) supported by better fixed cost absorption. Overall, we model revenue of $27.7bn (vs. $27.2bn prior) and EPS of $0.30 vs. consensus at $0.41. We also factor in lower energy storage deployment at 13.7Gwh vs. our 15.0Gwh estimate. Having cleared out a lot of inventory, 4Q deliveries should track production more closely and may be more supply-constrained, but Giga Texas is ramping Model Y L output, which should sup