Prof G Markets Tesla Profits Plunge 37% Despite Record Sales — Here’s Why
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Oct 23, 2025 
Tim Higgins, a Wall Street Journal columnist with expertise in the auto industry, discusses Tesla's quarterly results, highlighting a 37% profit plunge despite record sales. He attributes this decline to tariffs, rising operating costs, and depleted regulatory credits. Luke Kawa, Markets Editor at Sherwood News, analyzes the recent meme stock frenzy around Beyond Meat, explaining the debt-for-equity swap, retail investor dynamics, and how these stocks often rely on social media hype. The conversation touches on market trends and the future of meme stocks.
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Record Deliveries But Falling Profit
- Tesla delivered a record quarter but net income fell about 37% year-over-year.
- Tim Higgins attributes the profit drop to lower EV prices, tariffs, and fading regulatory credit sales.
Regulatory Credits Were A Profit Cushion
- Tesla's regulatory credit revenue has declined and is expected to fall further.
- Losing that easy profit source materially pressures Tesla's future margins.
Tax Credit Pull-Forward Distorts Growth
- The end of U.S. EV tax credits pulled demand forward into the quarter boosting deliveries.
- Higgins warns Tesla lacks new mainstream vehicle launches to sustain growth beyond the credit-driven bump.