Tesla Q1: beat, but cautious

Tesla beat profit estimates for the first quarter, then warned it will spend far more this year, and the stock lost ground after the call. (cnbc.com) The company reported adjusted earnings of $0.41 a share on $22.39 billion in revenue for the quarter ended March 31, 2026. Net income was $477 million, up from $409 million a year earlier. (cnbc.com; finance.yahoo.com) Tesla said 2026 capital spending will run more than $25 billion, up from prior guidance of more than $20 billion, as it pours money into artificial intelligence, batteries and factory expansion. Elon Musk said investors should expect “a very significant increase” in capital expenditures. (bloomberg.com; finance.yahoo.com) That spending push landed after a quarter in which Tesla delivered 358,023 vehicles while producing 408,386, leaving inventory at 27 days of supply, up from 15 days at the end of the fourth quarter. The mismatch showed Tesla is still making cars faster than it is handing them to customers. (finance.yahoo.com) Management used the quarter to steer attention back to margins and newer businesses. Automotive gross margin excluding regulatory credits rose to 19.2%, and free cash flow reached $1.44 billion. (cnbc.com; finance.yahoo.com) Tesla also told investors it is ramping projects beyond its core car business. Its shareholder update said the company began unsupervised Robotaxi rides in Dallas and Houston in April and is preparing lines for Megapack 3, Cybercab and the Tesla Semi. (assets-ir.tesla.com) Those plans come with more caution than some investors wanted. Yahoo Finance’s transcript summary said Tesla described robotaxi expansion as gradual and warned that near-term free cash flow is expected to turn negative during this heavier investment phase. (finance.yahoo.com) The auto business is still carrying the company while competition gets tougher. CNBC said Tesla’s shares had already fallen 14% this year through Wednesday’s close, with BYD and Xiaomi pressing the company in electric vehicles. (cnbc.com) Tesla tried to answer that pressure with lower-priced versions of existing models rather than a brand-new mass-market car. The company said it plans “more affordable trims” of the Model Y and Model 3. (cnbc.com) The immediate message from Wall Street was that the quarter’s beat did not settle the bigger debate. Tesla showed it can lift margins and profits now, but it also told investors the bill for robotaxis, robotics and factory buildouts is about to get much larger. (cnbc.com; bloomberg.com)