Tesla shares fell 3.5% after quarterly earnings missed analyst expectations even as revenue reached a record US$27.9 billion. Rising input costs and weaker automotive margins offset delivery growth. Analysts said price cuts across global markets and ongoing production adjustments weighed on profitability. The company reaffirmed its long-term output goals but signaled tighter cost controls heading into 2026. Broader EV sector sentiment softened as investors questioned near-term valuation premiums, prompting some funds to rotate into traditional automakers and energy stocks for stability.