Elon Musk waves to the crowd during the 56th annual meeting of the World Economic Forum in Davos, Switzerland, Jan. 22, 2026.
Denis Balibouse Reuters
Tesla reported first-quarter earnings on Wednesday that beat analysts’ estimates even if revenue came in weaker than expected.
Shares of the electric car maker initially rose nearly 4% in extended trading but gave up their gains after the company revealed that spending this year would be $5 billion more than previous guidance.
Here’s how the company fared, compared to ratings from analysts polled by LSEG:
- Earnings per share: 41 cents adjusted versus 37 cents expected
- Net worth: $22.39 billion vs. $22.64 billion expected
Tesla stock has underperformed all of its megacap peers so far this year, down 14% as of Wednesday’s close. The company’s core automotive business continues to struggle against global rivals such as China’s BYD and Xiaomi.
Revenue increased 16% in the quarter from $19.3 billion a year ago, according to Tesla’s financial statement. In its auto division, revenue also rose 16% to $16.2 billion from $14 billion last year. Tesla confirmed in an earnings call that it plans to make “affordable versions” of its Model Y SUV and Model 3 sedans.
The past year has been a challenge as rivals offer higher-tech but less expensive models compared to Tesla’s aging lineup of electric vehicles. Tesla is also facing an ongoing consumer backlash in response to CEO Elon Musk’s work with the Trump administration, his fiery political rhetoric and endorsements of far-right politicians.
Earlier this month, Tesla reported that 358,023 vehicles were delivered in the first quarter, which was lower than the previous quarter and up about 6% from a year ago. Tesla has recorded annual declines for the past two years, with last year’s quarterly decline caused by a “loss of several weeks of production,” as the company ramped up Model Y factory lines.
Net income rose to $477 million, or 13 cents a share, from $409 million, or 12 cents a share, a year earlier.
Gross margins for Tesla vehicles, excluding the sale of environmental debt, came in at 19.2%, higher than any quarter last year. The company said margins were helped by lower average selling prices and “lower average costs per vehicle due to lower inventory costs.”
Profits were also boosted by what the company described, in its shareholder filing, as “one-time benefits” related to costs, and its vehicle warranties. In February, the Supreme Court struck down a large part of President Donald Trump’s far-reaching tax agenda, and companies are now seeking refunds from the federal government. CFO Vaibhav Taneja said on the earnings call that the company has not yet benefited from the Supreme Court ruling.
Capital expenditures fell 67% in the quarter to $2.49 billion from $1.49 billion in the same quarter last year. Taneja said on the call that capex will increase by $25 billion this year, up from the last quarter’s 2026 forecast of $20 billion. That’s an increase from $8.6 billion in 2025.
In its energy division, which sells solar installations and a range of battery storage systems, Tesla reported revenue of $2.41 billion for the quarter, down 12% from $2.73 billion in the previous quarter.
Musk has been trying to change the narrative surrounding his company by focusing on efforts in self-driving technology and humanoid robots. While the company is testing a small number of self-driving cars in its ride-hailing service in Texas, Tesla still relies on EV sales for most of its revenue and has yet to sell a robotaxi-ready car.
Tesla said in January it will end production of the Model S and X cars, and use a factory in Fremont, California, to build Optimus humanoid robots. The company said Wednesday that “preparations for our first large-scale Optimus factory will begin as soon as Q2,” with a “first-generation production line” plan to build one million robots a year.
Musk has a history of setting ambitious goals to develop future products.
In the lead call, Musk said older Tesla cars with Hardware 3 computers will not be able to use the company’s “unsupervised” FSD systems, which are intended to make their cars capable of operating without driving, or safe to use without active human supervision.
The company said it plans to establish a “discount trade-in” for cars with older hardware, and will allow customers to upgrade their cars’ computers and cameras to enable future self-driving systems.
When asked about Tesla’s plans to reveal the next version of Optimus, Musk said that “competitors are doing a frame-by-frame analysis and copying everything we do,” so they would like to “unveil” the humanoid near the start of production, which he said will be “somewhere in late July, August time.”
Tesla announced that it was working on a humanoid robot in August 2021 but did not show a prototype until September 2022. It faces competition from China’s Unitree, Boston Dynamics, Agility Robotics, Apptronik and others.
Tesla is the first of the multi-billion dollar tech companies to report quarterly results. Alphabets, Amazon, Meta again Microsoft they are scheduled to report next Wednesday, and the following day an apple.
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