Tesla (TSLA) Q1 2026 earnings summary

Executive summary

• Q1 2026 featured a 16% YoY revenue increase to $22.4B, with significant progress in AI, manufacturing, and infrastructure, and a focus on core technologies, battery, and supply chain resilience.

• Vehicle demand grew in APAC, EMEA, South America, and North America, with record Q1 order backlog and notable delivery growth in France, Germany, South Korea, and Japan.

• Major milestones included FSD (Supervised) 4 approval in the Netherlands, unsupervised Robotaxi launches in Dallas and Houston, and the start of Cybercab and Semi production at Gigafactory Texas.

• FSD adoption reached nearly 1.3 million paid customers globally, with regulatory approvals progressing in Europe and China.

• Investments prioritized affordability, utility, and supply chain resilience amid global uncertainties.

Financial highlights

• Total revenue rose 16% YoY to $22.4B, with automotive sales up 20% to $15.47B and services revenue up 42% to $3.75B.

• GAAP net income was $0.5B; non-GAAP net income was $1.5B, and operating income increased 136% YoY to $0.9B with a 4.2% margin.

• Gross margin improved to 21.1% (up from 16.3% YoY), with automotive gross margin at 21.1% and energy storage gross margin at 39.5%.

• Free cash flow ended at $1.4B, with operating cash flow at $3.94B and cash/investments at $44.7B.

• Net income was impacted by a 22% depreciation in Bitcoin holdings and unfavorable FX from intercompany borrowings.

Outlook and guidance

• Over $25B in CapEx planned for 2026, funding six factories, major AI infrastructure, and global manufacturing expansion.

• Expectation of negative free cash flow for the remainder of 2026 due to heavy CapEx, viewed as necessary for long-term growth.

• Focus on maximizing factory capacity utilization, scaling Robotaxi, advancing battery and AI compute technologies, and expanding global infrastructure.

• Energy storage deployments for 2026 projected to exceed 2025 levels despite Q1 decline.

• Volume production of Cybercab, Tesla Semi, and Megapack 3 scheduled for 2026, with gradual rollout of unsupervised FSD in more geographies.