Key Highlights
- Revenue reached $22.39B with EPS of $0.41, surpassing analyst forecasts of $22.08B and $0.35 respectively
- Gross margin achieved 21.7%, significantly exceeding the 17.7% analyst projection
- Management announced capital expenditure exceeding $25 billion for 2026, rising from previous $20B projections and indicating negative free cash flow ahead
- Autonomous ride service launched in Dallas and Houston with fully unsupervised vehicle operations
- Shares declined more than 3% in early Thursday trading; Mizuho analysts reduced their price target from $540 to $480
Tesla delivered impressive first-quarter financial results that surpassed analyst projections across major metrics — yet the stock retreated on heavy capital spending forecasts.
The electric vehicle manufacturer posted quarterly revenue of $22.39 billion, exceeding the Street’s $22.08 billion projection. Adjusted earnings per share reached $0.41, beating the $0.35 consensus. Gross margin landed at 21.7%, substantially above analyst estimates of 17.7%.
Despite these strong operational metrics, TSLA shares dropped more than 3% during Thursday’s premarket session. The pressure came from an updated capital expenditure outlook that surprised market participants.
CFO Vaibhav Taneja revealed during the quarterly conference call that Tesla’s 2026 capital spending would reach “over $25 billion” — representing an increase from the previously communicated $20 billion figure and a substantial escalation from approximately $9 billion spent in fiscal 2025. Management indicated this investment level would produce negative free cash flow through year-end.
Autonomous Taxi Service Reaches New Markets
Tesla announced its Robotaxi platform expanded into Dallas and Houston markets over the recent weekend, featuring fully “unsupervised” operations without safety drivers present. The deployment timeline moved faster than market observers anticipated, though Tesla continues withholding specific data on fleet composition or the count of autonomous vehicles operating in each metropolitan area.
Robotaxi mileage nearly doubled from the previous quarter during Q1. Management confirmed that Cybercabs will progressively replace the Model Y vehicles currently deployed in the service. Before this recent expansion, Tesla’s autonomous taxi operations were limited to Austin, with traditional ride-hailing available in the San Francisco Bay Area.
Regarding manufacturing timelines, Cybercab, Tesla Semi, and Megapack production all remain on their planned schedules.
CEO Elon Musk indicated during the earnings discussion that Optimus V3 would be unveiled around production commencement, anticipated for July or August. He suggested that Optimus would “probably” become available for external customers sometime in the following year.
Tesla confirmed its AI5 chip has completed tape-out — the final design phase before manufacturing. The semiconductor will power upcoming electric vehicles, training infrastructure, and Optimus humanoid robots, with production planned at Tesla’s forthcoming Terafab manufacturing complex in Austin. Industry analysts have characterized the internal chip fabrication strategy as extraordinarily ambitious, with Bloomberg sources indicating silicon manufacturing won’t commence until 2029.
Wall Street Response Shows Divergence
Mizuho preserved its Outperform rating while reducing its price objective to $480 from $540, pointing to near-term volume challenges. The investment bank projects EV unit growth around 4% year-over-year for 2026, down considerably from 30% growth in 2025.
Goldman Sachs retained its Neutral stance with a $375 price target. Truist maintained its Hold rating at $400. TD Cowen continued recommending shares as a Buy, highlighting potential from autonomous driving technology and robotics development.
Tesla’s automotive gross margin, when regulatory credits are excluded, touched 19.2% in Q1 — climbing 120 basis points sequentially, supported by tariff adjustments and warranty reserve changes.
First-quarter vehicle deliveries totaled 358,023 units, landing slightly below the 364,645 consensus estimate, though year-over-year comparisons benefited from last year’s Model Y production transition disruptions.
