AUSTIN, Texas – Tesla beat Wall Street’s profit expectations in the first quarter of 2026 as the automaker said demand for its electric vehicles is rebounding around the globe, hinting at a possible recovery for its long-struggling automotive business.
But its shares slipped 0.3 per cent in after-hours trading on April 22, after Tesla said it expects to invest more than US$25 billion (S$31.9 billion) in 2026 – an increase of US$5 billion from its prior estimate.
Tesla’s adjusted earnings rose to 41 US cents a share in the first quarter, higher than the 34-cent average of analyst estimates compiled by Bloomberg. It’s the second straight quarter Tesla’s earnings have exceeded expectations.
Tesla said it “saw continued growth in demand for our vehicles” in parts of Asia and South America, along with a rebound in North America and the Europe-Middle East region. The surprisingly optimistic comments come several weeks after the automaker reported one of its worst quarter in years.
Tesla chief financial officer Vaibhav Taneja said the company has seen increased customer interest amid rising petrol prices.
“We have seen a slight growth in terms of quarter-over-quarter deliveries on the order backlog front,” Mr Taneja said.
The report “confirms that while the legacy EV business is no longer growing rapidly, it’s stable enough to fund Tesla’s heavy investments in robotics and self-driving technology,” Andrew Rocco, a Zacks Investment Research analyst, said in a note.
The trajectory of Tesla’s core automotive business has been a watch point for investors as chief executive officer Elon Musk has reoriented the company around new business lines including robotics and driverless cars.
Tesla will be “substantially increasing” its vehicle production and investments going forward, Mr Musk said on a conference call with analysts. “You should expect to see a very significant increase in capital expenditure.”
For the first three months of 2026, however, Tesla spent less than US$2.5 billion – roughly half the outlay the company will need to average per quarter to reach its expenditure forecast for the year. This contributed to Tesla posting US$1.4 billion in positive free cash flow for the quarter, far better than analysts’ expectation that the carmaker would burn through almost US$1.9 billion.
The first quarter was the second-worst for vehicle deliveries since mid-2022, trailing only a year earlier when Tesla paused production of its Model Y and dealt with widespread backlash to Musk’s political activities.
Tesla said it remains on track to start making key products including Cybercab, Semi and an updated version of its Megapack battery storage system.
The EV maker reiterated plans for its nascent ride-hailing business it calls Robotaxi, saying the business is on track to expand to Phoenix, Miami, Orlando, Tampa and Las Vegas in the first half of 2026. Robotaxi, which was originally envisioned as a driverless service, began in Austin last year and has slowly expanded since then. In April, it also launched in Houston and Dallas. BLOOMBERG
