Tesla beat Wall Street’s Q1 expectations on nearly every line — but it was the spending outlook that sent the stock lower.
The company reported revenue of $22.39 billion, ahead of the $22.08 billion consensus. Adjusted EPS came in at $0.41, topping the $0.35 estimate. Gross margin hit 21.7%, far above the 17.7% forecast.
Despite those numbers, TSLA slid more than 3% in premarket trading Thursday. The culprit? A capex guidance update that caught some investors off guard.
CFO Vaibhav Taneja said on the earnings call that Tesla’s 2026 capital expenditure would come in “over $25 billion” — up from a prior $20 billion estimate and a sharp jump from roughly $9 billion in fiscal 2025. The company said this spending would result in negative free cash flow for the remainder of the year.
Tesla said its Robotaxi service expanded to parts of Dallas and Houston over the weekend, with “unsupervised” operation — no safety driver — already running in those markets. That’s a faster rollout than some expected, though Tesla still doesn’t disclose fleet sizes or the number of unsupervised vehicles in any city.
Robotaxi miles nearly doubled sequentially in Q1. Tesla said Cybercabs will eventually replace the Model Y SUVs currently used in the service. Prior to this expansion, Tesla only operated Robotaxi in Austin and ride-hailing in the San Francisco Bay Area.
On the production side, Cybercab, Tesla Semi, and Megapack are all described as on schedule.
CEO Elon Musk said on the call that Optimus V3 would be revealed around the start of production, likely July or August. He added that Optimus would “probably” be useful outside of Tesla sometime next year.
Tesla also confirmed that its AI5 chip has been taped out — completing the final design stage. The chip is destined for future EVs, training clusters, and Optimus robots, and will be produced at Tesla’s upcoming Terafab facility in Austin. Analysts have flagged the in-house chip fabrication push as highly ambitious, with sources telling Bloomberg that silicon production won’t begin until 2029.
Mizuho maintained its Outperform rating but cut its price target to $480 from $540, citing near-term demand headwinds. The firm estimates EV volume growth of roughly 4% year-over-year in 2026, compared to 30% in 2025.
Goldman Sachs kept a Neutral rating with a $375 target. Truist held its Hold at $400. TD Cowen maintained a Buy, pointing to autonomous vehicle and robotics catalysts.
Tesla’s automotive gross margin, excluding credits, reached 19.2% in Q1 — up 120 basis points quarter-over-quarter, helped by tariff relief and warranty writedowns.
Q1 deliveries of 358,023 vehicles came in slightly below the 364,645 expected, though the year-ago figure was weighed down by the Model Y changeover, making the comparison favorable.
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