Tesla earnings beat, but TSLA stock falls on Elon Musk comments; HW3.0 'does not have the capability'

TeslaTSLA reported first-quarter earnings late Wednesday that beat Wall Street forecasts, though there were some one-time factors.. Tesla stock rose solidly in initial after-hours action, but turned lower amid CEO Elon Musk's comments on the earnings call.

Musk stressed that heavy capital spending is coming, with the company hiking already-high capex plans for the year. He conceded that Tesla EVs with Hardware 3.0 aren't capable of achieving self-driving. While Musk and execs see progress in robotaxis and more, improvements and meaningful revenue will come slowly.

Tesla Stock Falls Before The Open

Tesla stock fell 2.7% to 377.10 in premarket trade Thursday.

7:55 p.m. ET

Tesla Earnings: One-Time Factors

In the Tesla earnings statement, the company listed several factors affecting operating profit, which jumped 136% vs. a year earlier to $941 million

The No. 1 item: "Increase in automotive one-time benefits related to warranty and tariffs."

The No. 4 item: "Increase in energy one-time benefits related to tariffs."

Tesla's CFO later said that Tesla got $250 million in "tariff relief," but said it wasn't related to the IEEPA tariffs that the Supreme Court struck down earlier in the year. The warranty factor likely is due to lower warranty reserves.

Tesla also extended supplier payments to 71 days from 61 days in Q4 and 52 days in Q3, though it was slightly lower than the 72 days in Q1 2025.

The make-up of Tesla earnings could be another reason why Tesla stock reversed lower.

7:20 p.m. ET

Tesla Stock Paring Losses

Tesla stock was down 0.3% as extended trade continues. Shares rose 4% or more after the earnings beat, then retreated during the Tesla earnings call, down about 2.5% when that event ended.

Keep in mind that Tesla could change course again overnight, or during Thursday's trading session.

6:32 p.m. ET

Tesla Earnings Call Over, Stock Lower

The Tesla earnings call ended at 6:31 p.m., with Tesla stock down 2.5% in extended trading. Shares were up nearly 4% following earnings but before the Elon Musk-led call.

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6:26 p.m. ET

Musk On New Vehicles: Autonomous

In response to a question about possible new EVs for untapped auto niches, Musk said he expects most of Tesla's future production to be the Cybercab. He expects the entire lineup to be autonomous eventually. He expects the only manually driven car long term will be the long, long awaited Roadster. Musk said the new Roadster could be unveiled in a month or so, predicting a "spectacular" demo.

Tesla stock is down 1.7%.

5:13 p.m. ET

Tesla-SpaceX Terafab Project Still Being Worked Out

On the Tesla-SpaceX Terafab project, Elon Musk said the companies are still working on the details about responsibilities and who will pay for what. Tesla will build a research fab for the project. That could cost $3 billion.

SpaceX will take responsibility for the initial phase of the actual Terafab.

The total Terafab could cost $20 billion-$30 billion, perhaps far more. Seeking to achieve cutting-edge AI chips with no experience in chipmaking is a big ask.

Tesla stock is now down 0.4%.

6:09 p.m. ET

Musk On FSD 14.3

In response to a question, Musk said the latest version of FSD, FSD 14.3, is the "final piece of the puzzle" as he's said previously, but he said large-scale rollouts probably shouldn't happen when "large-scale improvements" in the software are coming.

6:03 p.m. ET

Musk: Hardware 3.0 'Does Not Have The Capability'

Musk "just guessing," says unsupervised FSD will probably reach customers in the fourth quarter, but says certain markets may be more complicated.

However, Musk said, "Unfortunately, Hardware 3.0 does not have the capability" to reach unsupervised FSD.

That's a huge admission, because Musk had sold HW3.0 as being "hardware ready." He's going to offer a discounted trade-in for newer models or to upgrade the car via "mini-factories" that would have to be built.

All of that could be expensive, and some buyers, many of which paid $15,000 for FSD, may sue for refunds.

Tesla stock briefly turned negative on that news, but are back to up 0.6%.

5:49 p.m. ET

CFO Sees Solid EV Demand, Strong Energy Backlog

CFO Vaibhav Taneja said EV demand was strong, with that starting before the surge in gasoline prices. While Tesla Energy can be "lumpy," he said the storage backlog remains high. He once again warned that Energy margins could come under some pressure.

5:48 p.m. ET

Tesla Stock Pares Gains

Tesla stock, up about 4% heading into the earnings call, is now up just 0.6% to 389.77, above the 50-day line but below the 200-day.

5:42 p.m. ET

Optimus Ready To Show Mid-Year

Musk said the latest version of the Optimus robot will be ready to show off by the middle of the year. Tesla had missed a previous goal unveiling Optimus v3 by the end of Q1.

5:40 p.m.

Musk: FSD 15 By Early Next Year

While touting the recent release of FSD 14.3, Elon Musk said FSD version 15 should be out by the end of the year or early 2027.

He noted that robotaxis have expanded to Dallas and Houston.

5:37 p.m. ET

Elon Musk Says Capital Spending Surge Coming

While Tesla capex was far below Q1 views, Elon Musk said a big ramp up is coming.

"You should expect to see a very significant increase in capital expenditure."

The company raised its full-year capital spending plan to $25 billion, up from previous forecasts for $20 billion, and roughly triple 2025's level.

5:37 p.m. ET

Musk: Optimus 'Useful' Next Year

Musk said he's hoping Optimus is useful "outside of Tesla," sometime this year.

5:33 p.m. ET

Tesla Earnings Call Underway

The earnings call began at 5:33 p.m. ET.

5:29 p.m. ET

FSD Subscriptions Jump

Active FSD subscriptions were 1.28 million in Q1, up 16% vs. Q4 and 51% vs. a year earlier.

5:14 p.m. ET

Tesla Touts Rebounding Demand For Its EVs

"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 said in its earnings release.

Tesla presumably is getting a boost, along with many other EV makers, from soaring gasoline prices worldwide. In the U.S., EV sales could have improved sequentially vs Q4, when sales plunged following the end of the $7,500 tax credit on Sept. 30. Also, Tesla had easy comparisons vs. a year earlier, when the Model Y changeover was taking place.

4:39 p.m. ET

Tesla Stock Rises

Tesla stock rose 3.6% to 401.60 in after-hours action. That signals a move above the 50-day moving average and, barely, the 200-day line.

A move above Friday's high of 409.28 would offer an aggressive entry. TSLA stock is in a four-month consolidation with a 498.83 buy point.

4:36 p.m. ET

Tesla Energy Revenue Falls

Amid a big drop in battery storage deployed in Q1, Tesla Energy came in at $2.41 billion, down sharply from $3.84 billion in Q4 and 12% below Q1 2025's $2.73 billion.

4:34 p.m. ET

Regulatory Credit Revenue Declines

Tesla earnings beat views even though revenue from regulatory emissions credits fell to $380 million vs. $542 million in Q4 and $590 million in Q1 2025. Analysts expected to $407 million.

4:17 p.m. ET

Tesla Sees 'Volume Production' For Cybercab, Tesla Semi, Megapack 3

"Cybercab, Tesla Semi and Megapack 3 are on schedule for volume production starting in 2026," Tesla said in the earnings release.

Optimus production lines are being set up, "in anticipation of volume production."

4:13 p.m. ET

Tesla Doesn't Burn Cash: Here's Why

Tesla reported positive cash flow of $1.444 billion, surprising analysts expecting a cash burn. The reason? Capital expenditures came in at $2.493 billion, up significantly vs. a year earlier but far below analysts estimates of $4.33 billion. Tesla had forecast capex of $20 billion in 2026.

4:06 p.m. ET

Tesla Earnings

Tesla earned 41 cents a share, up 51% vs. 27 cents in Q1 2025 vs. the FactSet estimate of 35 cents and the Tesla-compiled consensus of 33 cents.

Revenue rose 16% to $22.39 billion, up from $19.335 billion a year earlier. FactSet expected $22.101 billion and the company-compiled forecast was $21.417 billion.

4 p.m. ET

Tesla Stock Closes Fractionally Higher

Tesla stock rose 0.3% to 387.51 on Wednesday, backing off from the 50-day moving average and modestly below the 200-day line.

Futures Mixed After Nasdaq Hits High; Tesla Jumps Late

3 p.m. ET

Regulatory Credits

Tesla has long benefited from selling zero-emission credits to other automakers seeking to meet pollution standards. It's essentially pure profit, and a hefty share of Tesla's net income.

But ZEV credit revenue, already waning due to lower EV sales, are set to continue sliding Trump's 2025 tax-and-spending legislation, the One Big Beautiful Bill Act, eliminated ZEV credits in the U.S.

Tesla's deferred performance obligations for ZEV revenue was at $841 million as of Dec. 31, a decline of $3.84 billion vs. the end of 2024.

Tesla still has some flexibility about when to recognize that revenue, and will still get some new credits from Europe.

Analysts expect Tesla to report $407 million in auto regulatory credit revenue vs. $542 million in Q4 and $595 million in Q1 2025.

2:22 p.m. ET

Tesla Autonomy Anniversary

Not only does April 22 mark earnings day for Tesla, but it's also the seventh anniversary of Tesla Autonomy Day.

On April 22, 2019, Tesla introduced Hardware 3.0, with Elon Musk claiming that all vehicles with HW3.0 were hardware ready for full autonomy. But Tesla Full Self-Driving owners with HW3.0 vehicles haven't received an update since FSD 12.6.4 while HW4.0 vehicles are on FSD 14.

On Autonomy Day, Musk aimed for one million "robotaxis" on the road by 2020.

1:57 p.m. ET

Tesla Energy

Amid Tesla's struggling EV business and hopes for robotaxis and robots in the future, the Tesla Energy battery storage business has been a bright spot in terms of growth and margins.

But Tesla deployed just 8.8 gigawatt-hours of energy storage products in Q1, down from 14.2 GWh in Q4 and 11 in Q1 2025. Analysts had expected 14.4 GWh worth in Q1.

Investors will want reassurance that Q1's Tesla Energy decline was a blip due to lumpy deployments and not something more meaningful.

On the Q4 2025 earnings call in January, Tesla did warn of reduced Energy margins in 2026 due to competition, tariffs and policy uncertainty.

1:10 p.m. ET

Tesla Stock Reaction After Prior Earnings Reports

After the Q1 2025 earnings report, Tesla stock jumped 4.6% in the following session. After the Q2 report, TSLA dived 8.2%. Following Q3 earnings, Tesla gained 2.3% in an upside reversal. After the Q4 report, TSLA stock fell 3.45%.

Keep in mind that Tesla could move in one direction after the earnings release, then reverse course during the Elon Musk call, before switching gears during the following regular session.

9:16 a.m. ET

Tesla Robotaxis, Full Self-Driving

While Tesla earnings are important, investors really want to know when truly unsupervised robotaxis will be widespread and when Full Self-Driving will achieve autonomous driving.

Tesla launched its robotaxi ride-hailing service in Austin, Texas, and then the San Francisco Bay area last year. Those initially all had safety drivers or monitors. In January, just before the Q4 earnings report, Tesla began unsupervised robotaxis in Austin, but in a limited area. Only a few such autonomous taxis appear to be operating at any one point.

On Saturday, Tesla expanded its robotaxi ride-hailing service to parts of Dallas and Houston. However, the number of vehicles serving those cities appears to be low. It's unclear how many might be unsupervised.

The Tesla CEO said on the Q4 earnings call in January that he expects to have fully autonomous vehicles "probably somewhere between a quarter and half of the United States by the end of the year" pending regulatory approval. Musk added that autonomous Tesla vehicles will be in "dozens" of major U.S. cities by the end of 2026.

But he had made similar forecasts last year for the end of 2025.

Meanwhile, Tesla released Full Self-Driving 14.3 earlier this month. Last year, Musk claimed FSD 14.3 would be almost "sentient." While FSD 14 has shown a significant improvement vs. prior variations, it remains a Level 2 driver-assist system.

9:03 a.m. ET

Cash Burn And Capital Spending

Two big and related questions for Tesla earnings are cashflow and capital spending.

Tesla is expected to report cash burn of $1.538 billion in Q1, the first negative cash flow since Q1 2024. But cash flow is expected to remain negative throughout 2026, the first sustained cash burn since Model 3 production and deliveries ramped up in 2017-2018. .

That cash burn will come amid a surge in capital spending. Analysts estimate that Tesla capital expenditures reached a record $4.33 billion in Q1, up 81% vs. Q4 and 190% vs. Q1 2025.

On the Q4 earnings call, Tesla forecast 2026 capex of $20 billion, more than double last year's $8.53 billion. That excluded a Terafab chip project and big solar production plans. Tesla recently launched the Terafab project with Musk's SpaceX, aiming to produce their own cutting-edge AI and memory chips. That will be multiyear project costing tens of billions of dollars, while taking on Taiwan SemiconductorTSM and Samsung Electronics.

Tesla Earnings

Tesla earnings should rise nearly 30% to 35 cents a share adjusted, according to the FactSet analyst consensus. That would be the first increase since Q4 2024. Revenue is expected to climb 14% to $22.101 billion, which would be the biggest gain since Q2 2023.

FactSet estimates have fallen since Tesla reported weaker-than-expected first-quarter EV deliveries and battery storage deployed.

A separate Tesla-compiled consensus sees EPS at 33 cents and revenue at $21.417 billion.

Still, Q1 deliveries rose 6% vs. a year earlier, when Tesla was in the midst of its new Model Y changeover.

Tesla is expected to report a cash burn of $1.538 billion in Q1, according to FactSet. That would be the first negative cash flow since Q1 2024, amid surging capital spending.

Tesla Stock

Tesla stock rose a fraction in early Wednesday stock market trading.

Shares fell 3.5% to 386.42 over the last two sessions, falling back below the 50-day and 200-day moving averages. That followed last week's 14.8% surge. A post-earnings move above Friday's high of 409.28 would offer an aggressive entry.

TSLA stock is in a four-month consolidation with a 498.83 buy point, according to MarketSurge.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson  for stock market updates and more.

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