Tesla Q1 earnings landed ahead of Wall Street’s expectationson Wednesday, and right now that’s about the clearest thing the quarter has going for it. Adjusted EPS hit $0.41, topping the $0.36 consensus, and revenue of $22.39 billion also cleared estimates. Gross margin jumped to 21.1%, up from 16.3% a year ago — the strongest Q1 figure in quite a while. Tesla stock after hours spiked on the print, then reversed sharply once the company’s capital expenditure plans came out on the call. Investors are also watching the Tesla Robotaxi rollout, which has now pushed into Dallas and Houston.
The Tesla Robotaxi rollout is, at the time of writing, the part of the story investors follow most closely — and Tesla did have real progress to report here. The company pushed the service into Dallas and Houston, running it unsupervised, with no safety driver present in the vehicle. Robotaxi miles nearly doubled sequentially in Q1, and Cybercabs — the dedicated two-seat autonomous product — stay on schedule for volume production in 2026. Those will eventually take over from the Model Y SUVs currently running the fleet. Tesla still does not share how many vehicles operate in each city or how many run without a driver at any given time, so sizing the business with much confidence stays difficult.
The capital expenditure number really drove Tesla stock after hours into the red. CFO Vaibhav Taneja told analysts on the call that Tesla now targets capex above $25 billion for 2026 — up from $20 billion just last quarter, and a steep jump from $8.6 billion in 2025. The company also guided negative free cash flow for the rest of the year, a significant turn for a business that keeps pushing the “AI and robotics” pivot.
CFOVaibhav Tanejasaid on the call:
“Our current expectation for 2026 is over $25 billion of CapEx … we’re further increasing our investment in AI-related initiatives, including the AI infrastructure to support Robotaxi and the launch of Optimus.”
“We are in a very big capital investment phase, which is going to start now and would last a couple of years.”
That spending covers six factories — some already running, others coming online later this year — along with AI compute, battery materials, Cybercab, Tesla Semi, Megapack 3, Optimus, and the Terafab chip manufacturing facility Tesla plans to build in Austin. On the demand side, Tesla ended Q1 with its highest Q1 order backlog in over two years, recording growth in EMEA, APAC, and also North America.
CEO Elon Musk used part of the Tesla Q1 earnings call to walk through what the Optimus production ramp actually looks like. The company targets an Optimus V3 reveal in July or August, close to start of production, and preparations for a large-scale Optimus factory — targeting one million units per year — kick off in Q2.
Musk said on the earnings call:
“So you should expect that initial production of Cybercab and Semi will be very slow, but then ramping up and going kind of exponential towards the end of the year, and certainly next year.”
Source: Watcher Guru
