Tesla Q1 earnings landed forward of Wall Road’s expectations on Wednesday, and proper now that’s in regards to the clearest factor the quarter has going for it. Adjusted EPS hit $0.41, topping the $0.36 consensus, and income of $22.39 billion additionally cleared estimates. Gross margin jumped to 21.1%, up from 16.3% a 12 months in the past — the strongest Q1 determine in fairly some time. Tesla inventory after hours spiked on the print, then reversed sharply as soon as the corporate’s capital expenditure plans got here out on the decision. Traders are additionally watching the Tesla Robotaxi rollout, which has now pushed into Dallas and Houston.
Tesla Q1 Earnings and TSLA Earnings Beat on Robotaxi and Capex
The Robotaxi Rollout Strikes Into New Territory
The Tesla Robotaxi rollout is, on the time of writing, the a part of the story traders comply with most intently — and Tesla did have actual progress to report right here. The corporate pushed the service into Dallas and Houston, working it unsupervised, with no security driver current within the automobile. Robotaxi miles almost doubled sequentially in Q1, and Cybercabs — the devoted two-seat autonomous product — keep on schedule for quantity manufacturing in 2026. These will finally take over from the Mannequin Y SUVs presently working the fleet. Tesla nonetheless doesn’t share what number of automobiles function in every metropolis or what number of run with out a driver at any given time, so sizing the enterprise with a lot confidence stays troublesome.
Capital Expenditure Sends Tesla Inventory After Hours Decrease
The capital expenditure quantity actually drove Tesla inventory after hours into the crimson. CFO Vaibhav Taneja instructed analysts on the decision that Tesla now targets capex above $25 billion for 2026 — up from $20 billion simply final quarter, and a steep soar from $8.6 billion in 2025. The corporate additionally guided destructive free money stream for the remainder of the 12 months, a big flip for a enterprise that retains pushing the “AI and robotics” pivot.
CFO Vaibhav Taneja stated on the decision:
“Our present expectation for 2026 is over $25 billion of CapEx … we’re additional growing our funding in AI-related initiatives, together with the AI infrastructure to assist Robotaxi and the launch of Optimus.”
Taneja additionally added:
“We’re in a really large capital funding part, which goes to start out now and would final a few years.”
That spending covers six factories — some already working, others coming on-line later this 12 months — together with AI compute, battery supplies, Cybercab, Tesla Semi, Megapack 3, Optimus, and the Terafab chip manufacturing facility Tesla plans to construct in Austin. On the demand aspect, Tesla ended Q1 with its highest Q1 order backlog in over two years, recording development in EMEA, APAC, and in addition North America.
Musk on Optimus, Chips, and Manufacturing Timing
CEO Elon Musk used a part of the Tesla Q1 earnings name to stroll by way of what the Optimus manufacturing ramp truly appears like. The corporate targets an Optimus V3 reveal in July or August, shut to start out of manufacturing, and preparations for a large-scale Optimus manufacturing facility — focusing on a million items per 12 months — kick off in Q2.
Musk stated on the earnings name:
“So it is best to count on that preliminary manufacturing of Cybercab and Semi will probably be very gradual, however then ramping up and going type of exponential in direction of the tip of the 12 months, and positively subsequent 12 months.”
On holding again the Optimus V3 reveal, Musk stated:
“We’re additionally slightly hesitant to point out V3 off, as a result of we discover our rivals do a body by body evaluation at any time when we launch one thing and duplicate the whole lot they probably can. So I feel there’s some worth to, you realize, not exhibiting new know-how till it’s near manufacturing.”
Not the whole lot on the decision landed nicely. Musk confirmed that older Tesla automobiles working {Hardware} 3 computer systems won’t assist unsupervised FSD, saying the {hardware} “merely doesn’t have the aptitude” for full autonomy. Future Fund managing associate Gary Black famous that whereas the Tesla Q1 earnings beat forecasts cleanly, the valuation a number of may face downward stress over what he described as “backpedaling on timing of unsupervised FSD and Robotaxi from 2Q till late-2026 and even 2027.”
Heading into Q2, the Tesla Q1 earnings outcomes hand traders an honest ground — stronger margins, a broader Tesla Robotaxi rollout, and a clear beat on each EPS and income. Tesla’s capital expenditure surge and the FSD delay, although, will seemingly form how the market costs TSLA from right here. Tesla inventory after hours stated it plainly: up first, then proper again down.
