Tesla Q1 earnings preview: Robotaxi rollout, mega capex spending in focus

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Tesla Q1 earnings preview: Robotaxi rollout, mega capex spending in focus.

companies :: 1day ago :: source - yahoo finance

By Pras Subramanian

Tesla (TSLA) is set to report first quarter earnings after the bell on Wednesday, with Wall Street focused on the company’s slow-to-evolve Robotaxi rollout and capital expenditures, which are expected to balloon due to the company’s AI ventures.

Analysts expect Tesla to post revenue of $22.08 billion, down 9% year over year, according to Bloomberg consensus. Tesla’s adjusted EPS is expected to come in at $0.35, with adjusted EBITDA projected for $3.217 billion, down 14.4% versus Q1 last year.

The key to Tesla’s growth is the rollout of its Robotaxi service. Over the weekend, the company said it had expanded Robotaxi service to parts of Dallas and Houston.

Robotaxi now rolling out in Dallas & Houston 🤠 pic.twitter.com/G3KFQwqGxB
— Tesla Robotaxi (@robotaxi) April 18, 2026

Prior to this expansion, Tesla only offered Robotaxi service in Austin and ride-hailing services in the San Francisco Bay Area.

Tesla also revealed that its service in Dallas and Houston was “unsupervised,” meaning no safety driver is present, which had a limited rollout in Austin.

The big caveats here with Tesla are that the company doesn’t reveal how many Robotaxis are in the various geographic fleets at any time or how many are unsupervised.

Nevertheless, it is good news for Tesla bulls.

On Tuesday BofA Securities analyst Alexander Perry reiterated the investment bank’s buy rating on the stock, and $460 price objective based on Tesla’s robotaxi plans.

“We think investor focus for TSLA 1Q earnings will be on its robotaxi deployments, as it looks to disrupt the rideshare market and capture a portion of the $1tn+ market opportunity, and as competition accelerates with Uber & Waymo.” Perry wrote in a note to clients. “We are encouraged that Tesla announced on Saturday that it had expanded its robotaxi service to Dallas & Houston.”

Perry added the bank sees “significant embedded opportunity” from robotaxis, and believes Tesla is in the early stages of monetizing its autonomy efforts.

Morgan Stanley predicts Tesla will soon surpass 10 billion full self-driving (FSD) miles, a milestone for the company that could lead to further breakthroughs, given the data collected.

Future rollouts in new cities for Tesla’s fledgling Robotaxi service will be expected, as the company’s progress in this area has been slow to date, even with the expansion to Houston and Dallas.

Also front and center for Tesla will be its capital expenditures and the company’s projections for the rest of the year.

Tesla is projecting capex over $20 billion this year, a big jump from the $8.5 billion spent last year. This means Tesla’s free cash flow (FCF) is expected to drop into negative territory as well.

In addition to spending on new batteries, Cybercab production, Optimus robots, and AI compute, a massive piece of the capex spend will be related to its chipmaking endeavors, a key priority for CEO Elon Musk.

Tesla's new Terafab would be located in Austin, Texas. SpaceX

Tesla stock jumped last week on optimism on the chip front, with CEO Elon Musk claiming early Wednesday that Tesla was “taping out,” or had completed the final stage of the chip design process for its upcoming AI5 chip, destined for future EVs, massive training clusters, and Optimus.

Chips like the AI5 would be produced at Tesla’s upcoming Terafab facility, though analysts warn a move to create its own “fab” is highly ambitious and likely a massive engineering, as well as financial challenge.

Musk is also reportedly asking his team to push up production. Despite the call for “light-speed” movement, Tesla sources told Bloomberg that the fab will begin manufacturing silicon by 2029 and then scale up.

Adding to the challenge, Bernstein analysts claimed the entire project would require capital spending of $5 trillion to $13 trillion, an almost unimaginable sum.

It all adds up to an interesting report and earnings call on Wednesday.

And there’s still the core auto business, which reportedly may see a cheaper model joining Tesla’s aging product portfolio.

Earlier this month, Tesla reported Q1 deliveries of 358,023 vehicles globally, versus 364,645 expected, up 6.3% year over year. However, the company’s total from last year was down due to the changeover to the new Model Y, meaning Q1 results from last year were unusually low.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.