Tesla reports steep drop in profits despite US rush to buy electric vehicles

Carmaker exceeded Wall Street’s expectations with more than $26bn in revenue, but saw a 37% drop in profits

Despite record vehicle sales, Tesla saw a precipitous drop in profit in its most recent quarter.

A rush to buy electric vehicles before a US tax credit for them disappears had boosted Tesla’s flagging sales, leading to the automaker exceeding some of Wall Street’s projections in its most recent financial quarter. Yet the company failed to meet earnings expectations and its stock fell in after-hours trading.