Tesla profits rise 17% as Musk accelerates shift from cars to AI and robotics

Tesla's revenue rises again as it prepares for more AI and robotics

Tesla released its 2026 first-quarter financial earnings today, providing another look at the progress of Elon Musk's $1 trillion bet to transform his company into a leader of AI and robotics. Tesla said it earned $477 million in net income on $22.4 billion in revenue in the quarter that ended in April 2026. That's a 16 percent increase in revenue and a 17 percent increase in profits over the first quarter of 2025, when the company earned $409 million in net income on $19.3 billion in revenue. Tesla missed revenue expectations from Wall Street, which assumed approximately $22.64 billion in revenue. As part of the earnings update deck, Tesla said that preparations for its first "large-scale" factory to build its Optimus robots will begin in Q2. "The first-generation line, designed for 1 million robots a year, will replace the Model S and Model X lines in Fremont," Tesla said. Gigafactory Texas will host the second-generation line, "which is being designed for long-term annual production capacity of 10 million robots." Following Musk's announcement in January that Tesla was "restarting work" on its Dojo 3 supercomputer -- which Musk noted at the time will be "space-based AI compute" -- the earnings update deck said that Tesla is "continuing" its work on the project. The first quarter of the year seemed to offer a glimmer of hope when Tesla reported a modest 6 percent increase in sales year over year. But it's a misleading comparison considering sales in Q1 2025 were artificially depressed thanks to assembly line shutdowns for the Model Y "Juniper" refresh. The first quarter of 2025 also coincided with Musk's leadership of DOGE, his Nazi salute at President Trump's inauguration, and the first Tesla Takedown protests. The past three months have been a series of ups and downs for Tesla. The company launched a robotaxi service in Dallas and Houston, but the service appeared to be mostly unavailable due to the lack of vehicles. The Netherlands officially approved Tesla's Full Self-Driving (FSD) Supervised, making it the first European country to authorize the use of the company's Level 2 advanced driving assistance system on its roads. And Tesla seemed to come up with a solution for cratering Cybertruck sales: sell the polarizing electric truck to Elon Musk's own companies. Of course, Tesla isn't as into selling vehicles as it is developing AI and humanoid robots. The company discontinued its Model S and Model X vehicles to make room at its factory for production of its Optimus robot. And the Cybercab, the company's two-seater autonomous vehicle, has been spotted out on the road -- albeit with a steering wheel. That's led many Tesla watchers to assume that Musk has lost interest in selling cars, even though the vast amount of his company's revenues still comes from car sales. Notably, there was a recent Reuters report that Tesla was developing a new, more affordable electric SUV, after having canceled a similar plan two years ago.

Tesla earnings rise, but AI expenses add up for Elon Musk

Why it matters: CEO Elon Musk has directed the company to invest heavily in the development and production of humanoid robots, self-driving cars and AI chips. Driving the news: The company reported Q1 revenue of $22.4 billion, up 16% from a year earlier. * Net income totaled $477 million, up 17%, but operating expenses ballooned 37%, to $3.78 billion. * Its operating margin fell to 4.2%, declining sequentially for the second consecutive quarter. State of play: The company recently discontinued the Model S sedan and Model X crossover to make way for the production of the Optimus robot at its factory in Fremont, Calif. * The Model Y crossover -- its most popular vehicle -- could be similarly sidelined: "Once in production, we expect that Cybercab will begin to replace the existing Model Y fleet and will be the largest volume vehicle in the fleet over time," Tesla said in its earnings presentation. Zoom in: Tesla's first-quarter EV deliveries -- a close proxy for sales -- totaled 358,023. * That was up 6% from the same period a year earlier, when the company was dealing with a sales backlash from Musk's leadership of President Trump's Department of Government Efficiency. * But the quarter's performance marked an "underwhelming start" to the year, missing consensus estimates of 370,000, Wedbush Securities analyst and Tesla bull Dan Ives wrote in a research note. What's next: Tesla said it expects to reach volume production of the Cybercab and electric Semi in 2026.

Tesla profits up as Musk shifts focus to robotaxis

Tesla's profit rose in the first quarter as its car sales rebounded from a sharp slump in 2025. The electric vehicle maker, run by billionaire Elon Musk, said it earned $477 million (€407.7m) during the quarter, up 17% on a year earlier. Earnings per share totalled 13 cents. Adjusted for certain items, earnings per share were 41 cents, beating Wall Street estimates of 36 cents. Revenue came in below analysts' expectations, as it increased to $22.39 billion (€19.14bn), driven by a 16% rise in automotive revenues. However, both profit and revenue remain well below their peak, when Tesla's cars were rapidly gaining market share. That trend has now been reversed, as European and Chinese rivals take customers. Last year, the company lost its crown as the world's largest electric vehicle maker to China's BYD. Musk has repeatedly downplayed the company's struggles in car sales, emphasising that Tesla's future lies less in selling vehicles and more in providing self-driving taxi services. The company said robotaxi miles doubled in the first quarter compared with the fourth quarter of last year. These services are currently operating in San Francisco and three cities in Texas, including Austin, where Tesla is headquartered. Musk has also highlighted Tesla's development of robots for homes and businesses. In a conference call with investors on Wednesday, he spoke about breaking new ground with a planned factory in Texas to produce the robots, known as Optimus, with a potential capacity of 10 million units per year. "I think Optimus will be our biggest product," Musk said, adding, "not just Tesla's biggest product ever, but probably the biggest product ever." The company also noted that it has begun producing its so-called Cybercabs, which have neither pedals nor steering wheels. Musk added a teaser during the call, suggesting that Tesla could unveil a new manually driven Roadster sports car within the next month or so. The company is investing heavily in its transition, including $2.5 billion (€2.14bn) in capital expenditure last quarter, up 67% from the same period a year earlier. Musk warned of "a very significant increase" in spending in the future. Tesla expects capital spending of more than $25bn (21bn) this year, covering a substantial increase in investment for self-driving taxis, trucks, robots and a massive new chip factory to power its AI ambitions. As investors digested the CEO's remarks, Tesla's shares swung sharply, briefly surging before reversing course to close marginally lower.

Tesla beats Q1 estimates; stock falls after Musk tempers robotics, FSD hopes By Investing.com

Investing.com -- Tesla on Wednesday delivered a quarterly top- and bottom-line beat, as its core automotive business fared better than feared in the quarter. But shares of the company reversed course in aftermarket trade after CEO Elon Musk tempered some optimism over Tesla's pivot into robotics and autonomous driving. Tesla shares fell as much as 2.5% after-hours, reversing course from an over 4% gain. They traded down 0.7% at $384.69 by 20:26 ET (00:26 GMT). Get more earnings insights on InvestingPro Responding to questions during a post-earnings call, Musk said he did not know what Tesla's production rate for its Optimus robot will be in 2026. Musk flagged difficulties in transitioning the production lines for Tesla's Model S/X, which the company discontinued earlier this year, towards building robots. "Optimus is a completely new product with a completely new production line. It's just literally impossible to predict," Musk said, adding that production was likely to be "quite slow at first." Musk also flagged a "cautious approach" on Tesla's unsupervised autonomous driving and robotaxi plans, warning that revenue from the businesses will "not be super material" this year. But he noted that revenue from the two will be "material probably in a significant way next year." Musk also said that Tesla's older models-- running the company's Hardware 3 computer-- will not actually receive unsupervised full self-driving. This covers roughly 4 million Tesla vehicles, a large chunk of owners. Musk has repeatedly touted robotics and AI as the next major growth drivers for Tesla, arguing that the company's EV business was no longer core. But its first-quarter earnings were driven chiefly by improving growth in its automobile business. Tesla beats Q1 even as EV business fares better than expected The Elon Musk-led company earned 41 cents per share on revenue of $22.39 billion for Q1 2026. Analysts had been expecting a profit of 36 cents per share on revenue of $22.28 billion. Tesla's quarterly results come at a time when investors are closely watching the firm's progress in shifting from an EV manufacturer to a business focused on self driving, artificial intelligence, and robotics. The Magnificent 7 member's core automotive business has been hurting, with vehicle deliveries missing Wall Street expectations two quarters in a row. TSLA stock has easily been the worst-performing member of the Magnificent 7 club this year, with shares down 13.8% YTD. That compares to a 4.3% rise in the broader S&P 500 index. The company's total quarterly automotive revenue rose 16% Y/Y to $16.23 billion, while its gross margin improved 478 basis points from a year ago to 21.1%, beating the analyst estimate of 17.7%. Total vehicle deliveries were 358,023 in Q1, a 6% increase from a year ago. The company produced 408,386 vehicles in the quarter, up 13% Y/Y. "The report is good enough for the 4% bounce. Adjusted EPS beat (and even a slight beat on unadjusted), along with a revenue beat and a surprise flip to positive free cash flow," Steve Sosnick, chief strategist at Interactive Brokers, told Investing.com. "The car business improved, and there is nothing that disrupts the futurist products that give TSLA a premium valuation. All the key products in the pipeline (trucks, cabs, robots) are said to be on schedule. The key to the rest of the post-earnings reaction depends on what Musk says on the call," Sosnick added. Musk has publicly outlined his ambitions into turning Tesla into a robotics and AI player, resulting in high capital expenditure. "We continued to make meaningful progress on the build out of the infrastructure and AI software that underpins our Robotaxi and future robotics businesses in Q1. 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 EV maker said in a statement. "We saw continued growth in demand for our vehicles in markets in APAC and South America, while also seeing a rebound of demand in both EMEA and North America," Tesla added. Looking at updates in robotics, TSLA said preparations for its first large-scale factory to produce its Optimus robots will "begin shortly" in Q2. The first-generation line will replace Model S and Model X lines at its factory in Fremont, with a capacity of 1 million robots a year. "We are also preparing Gigafactory Texas for the second-generation line, which is being designed for long-term annual production capacity of 10 million robots," the company said. Turning to its Robotaxi business, paid miles in the autonomous cabs, called Cybercab, nearly doubled in Q1 from Q2. "Once in production, we expect that Cybercab will begin to replace the existing Model Y fleet and will be the largest volume vehicle in the fleet over time," Tesla said. The company's earnings report also comes at a time when top boss Musk has been preoccupied with carrying out what is expected to be a blockbuster initial public offering for his rocket company SpaceX later this year. Backers of Tesla have long called for a tie-up or even an eventual merger with SpaceX, arguing that the consolidation will bring already interconnected businesses together and allow Musk to bring more resources to bear in overhauling Tesla's business. Musk has also previously merged different sections of a sprawling business empire that often sees companies share resources. Tesla acquired SolarCity, another Musk venture, in 2016. In February, SpaceX and Musk's artificial intelligence startup xAI, which created the Grok chatbot, also fused to form a behemoth valued at $1.25 trillion.