Tesla (TSLA) reported first quarter earnings that topped estimates after the bell on Wednesday, with Wall Street focused on the company’s slow-to-evolve Robotaxi rollout and capital expenditures, which are expected to balloon due to the company’s AI ventures.
Tesla reported revenue of $22.39 vs. $22.08 billion per Bloomberg consensus, down 9% year over year. Tesla posted adjusted EPS of $0.41 vs. $0.35. Tesla’s gross margin also hit 21.7%, vs. 17.7% estimated.
On the call, CFO Vaibhav Taneja said the company’s 2026 estimate for cap-ex will be “over $25 billion,” and will result in negative free cash flow for the rest of the year.
Tesla stock jumped in after-hours trade but rolled over following the cap-ex announcement.
“We commenced ramp of additional AI compute, new factories across battery and battery materials, and further prepared lines for start of production of Megapack 3, Cybercab and the Tesla Semi,” the company said in its Q1 release.
The key to Tesla’s growth is the rollout of its Robotaxi service. Over the weekend, the company said it had expanded Robotaxi service to parts of Dallas and Houston. Tesla said Cybercab, Tesla Semi, and its megapack battery production were all on schedule.
Tesla said robotaxi miles nearly doubled seqentially in Q1, with the company noting Cybercabs would eventually replace the Model Y SUVs used in service.
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Prior to this expansion, Tesla only offered Robotaxi service in Austin and ride-hailing services in the San Francisco Bay Area.
Tesla also revealed that its service in Dallas and Houston was “unsupervised,” meaning no safety driver is present, which had a limited rollout in Austin.
The big caveats here with Tesla are that the company doesn’t reveal how many Robotaxis are in the various geographic fleets at any time or how many are unsupervised.
In addition to spending on new batteries, Cybercab production, Optimus robots, and AI compute, a massive piece of the capex spend will be related to its chipmaking endeavors, a key priority for CEO Elon Musk.
Tesla stock jumped last week on optimism on the chip front, with CEO Elon Musk claiming early Wednesday that Tesla was “taping out,” or had completed the final stage of the chip design process for its upcoming AI5 chip, destined for future EVs, massive training clusters, and Optimus.
Tesla CEO Elon Musk said on the earnings call that Tesla would “probably have Optimus useful outside of Tesla sometime next year,” and that the reveal of Optimus V3 would occur near the start of production, likely July or August.
