The electric vehicle company posted stronger than expected earnings per share but missed revenue tar
Tesla posted first-quarter earnings of 41 cents per share after markets closed on Wednesday, clearing Wall Street’s estimate of 37 cents. Revenue came in at $22.39 billion, short of the $22.64 billion analysts had projected. The report was enough to push shares up more than 3% immediately after its release.
Revenue for the quarter grew 16% from $19.3 billion a year earlier. The automotive segment matched that growth rate, rising to $16.2 billion from $14 billion in the same period last year. Automotive gross margins, excluding environmental regulatory credits, landed at 19.2%, higher than any quarter in the previous year. The company attributed the improvement to a higher average selling price and reduced material costs per vehicle.
Net income climbed to $477 million, or 13 cents per share, up from $409 million, or 12 cents per share, a year ago.
Tesla’s energy business dipped while capital spending surged
Not every segment moved in the right direction. Tesla’s energy division, which covers solar installations and battery storage systems, brought in $2.41 billion for the quarter, down 12% from $2.73 billion in the year-ago period.
Capital expenditures climbed 67% to $2.49 billion, compared to $1.49 billion during the same quarter last year. That increase reflects the scale of investment Tesla is making as it prepares for what it describes as a major expansion in robotics manufacturing.
Tesla’s pivot toward robots and self-driving
CEO Elon Musk has spent much of the past year redirecting investor attention toward Tesla’s ambitions in artificial intelligence, autonomous vehicles, and humanoid robotics. The company’s self-driving cars are currently operating in several Texas cities, and Tesla confirmed Wednesday that preparations are underway to expand robotaxi service to three Florida cities and Las Vegas.
On the robotics side, Tesla announced that preparations for its first large-scale Optimus manufacturing facility will begin in the second quarter, with plans for an initial production line capable of building one million robots annually. The company ended production of its Model S and Model X vehicles earlier this year and plans to repurpose its Fremont, California factory for Optimus assembly.
Musk has a documented history of announcing ambitious timelines that shift before delivery.
The EV business is under genuine pressure
Tesla’s core automobile operation continues to face headwinds from multiple directions. The company delivered approximately 358,000 vehicles globally in the first quarter, below analyst projections and reflecting a broader softness in demand. In the United States, the decision by the Trump administration to eliminate a key federal tax credit for electric vehicles in 2025 has contributed to declining domestic sales.
Chinese automakers including BYD and Xiaomi have moved aggressively into markets where Tesla once held a stronger position, offering technologically competitive vehicles at lower price points. Tesla confirmed in its earnings materials that it plans to introduce more affordable versions of its Model Y SUV and Model 3 sedan in response.
Consumer sentiment has also played a role. Musk’s prominent involvement with the Trump administration, along with his political commentary and endorsements, has generated backlash that some analysts believe is weighing on brand perception and purchase decisions.
Tesla profits got a one-time boost
The company noted in its shareholder materials that profits included what it described as one-time benefits connected to tariffs and automotive warranties. CFO Vaibhav Taneja confirmed on the earnings call that Tesla has not yet received any direct financial benefit from a recent Supreme Court decision that struck down portions of the Trump administration’s tariff agenda, though companies are now pursuing federal refunds related to that ruling.
What comes next for Tesla
Tesla is the first among the major trillion-dollar technology companies to report quarterly results. Alphabet, Amazon, Meta, and Microsoft are scheduled to report the following Wednesday, with Apple reporting a day after that.
While investor enthusiasm around Tesla’s robotics and autonomous driving ambitions has helped stabilize its stock after a difficult stretch, much of the market’s focus has gradually shifted toward SpaceX, Musk’s rocket and satellite company. SpaceX filed confidentially for an initial public offering this month, seeking a valuation of $1.75 trillion. Tesla’s stock remains down roughly 11% for the year heading into the second quarter.