Tesla vs GM in Q3 2026: GM earned four times more, yet Tesla is worth over 20 times as much

Two of America's biggest carmakers reported their third-quarter results within a day of each other this week. General Motors went first on Tuesday October 20, Tesla followed after the market closed on Wednesday. Put the numbers next to each other and you get one of the strangest comparisons in the stock market: the company that earns far more money is worth a small fraction of the other.

The numbers side by side

• Revenue: GM $50.0 billion (up 2.9%); Tesla $28.05 billion (roughly flat).
• Net income: GM $3.34 billion, up from $1.33 billion a year earlier; Tesla $787 million, down from $1.37 billion.
• Earnings per share: GM $3.70 adjusted; Tesla $0.48 adjusted.
• Operating profitability: GM reported an adjusted EBIT margin of 8.2%; Tesla's GAAP operating margin was 2.6%. These are not identical measures, since GM's figure excludes items such as EV restructuring charges, but the gap is clear.
• Vehicle sales: GM's unit sales fell 5.5%; Tesla delivered 486,532 cars, about 2% fewer than the record 497,099 of a year earlier.

In other words, GM made more than four times as much profit as Tesla in the quarter, on nearly twice the revenue.

And yet the valuations

At Wednesday's close of $386.47 per share, Tesla's stock market value was about $1.53 trillion. GM had about 849 million shares outstanding at the end of September, and its shares traded around $77 in early trading after the results, which puts it at roughly $65 billion. That makes Tesla worth more than 20 times as much as GM.

The reason is simple: investors are not pricing Tesla as a carmaker. They are paying for what it might become. Robotaxis, unsupervised Full Self-Driving, the Optimus robot and the energy storage business are all part of the story. GM, by contrast, is valued as a mature car company with strong trucks and SUVs and limited expected growth.

Two very different uses for cash

The clearest difference is what each company does with its money.

• GM returns cash to shareholders. It has finished a $6 billion share buyback that began in January and approved a new $20 billion program. Its share count fell from 904 million at the end of 2025 to 849 million. GM also raised its 2026 forecast for adjusted automotive free cash flow to $11.5 to $12.5 billion.
• Tesla spends it on the future. Tesla now expects about $20 billion in capital spending for 2026, more than double the $8.5 billion of 2025. By comparison, GM plans $10 to $12 billion. Tesla's research and development spending rose 69% in the quarter to $2.76 billion, as it pours money into AI, Cybercab and Optimus. Even so, Tesla still generated $1.53 billion in free cash flow in the third quarter.

EVs are also on different paths. GM booked $238 million in charges for scaling back its EV capacity in the quarter, and $3.59 billion so far this year. Its profit growth is built largely on gasoline trucks and SUVs, though even there, higher fuel prices pushed some buyers toward smaller vehicles. Tesla sells only electric cars and has no such restructuring costs, but it faces its own margin pressure from lower prices and shrinking regulatory credit income.

Why it matters

The comparison shows the two bets investors can make. GM offers high current profits, buybacks and a low valuation, with the risk that its core business slowly shrinks as the market shifts. Tesla offers a chance at entirely new businesses, but its current earnings cover only a small part of its valuation, which makes the stock sensitive to any delay. That was visible this week: Tesla's shares fell after its call, as investors worried about slower progress on robots and capex, even though the quarter beat estimates. GM's stock also fell in early trading after its report, despite higher profits.

What to watch next

• Other carmakers' Q3 reports, including Ford's, will add more data points on EV losses and tariffs.
• Tesla's fourth quarter will show whether its margin recovery holds without one-off help such as this quarter's tariff refunds.
• GM's EV plans: whether further EV charges follow in the coming quarters.

This article is for information only and is not financial advice.