Tesla (TSLA) Stock Drops After Q1 Earnings Beat as Musk Tempers Robot and Robotaxi Hopes

TLDR

• Tesla beat Q1 2026 estimates with EPS of $0.41 vs $0.36 expected, and revenue of $22.39B vs $22.28B forecast
• The stock initially rose over 4% after results but reversed to fall ~2.5% after-hours following Musk’s comments on the earnings call
• Musk said Optimus robot production will be “quite slow at first” and that he cannot predict 2026 production rates
• Robotaxi and autonomous driving revenue will “not be super material” in 2026, but Musk says it will be “material in a significant way” in 2027
• Tesla plans to spend $25B on capex in 2026, up from prior guidance of $20B

Tesla posted a solid first-quarter beat on Tuesday, but the stock couldn’t hold its gains. An after-hours rally of more than 4% flipped to a loss of around 2.5% after CEO Elon Musk spoke on the post-earnings call.

Tesla, Inc., TSLA

The company earned $0.41 per share on revenue of $22.39 billion. Wall Street had penciled in $0.36 EPS and $22.28 billion in revenue. The automotive business, which many had feared would disappoint, actually held up well.

Total automotive revenue climbed 16% year-over-year to $16.23 billion. Gross margin hit 21.1%, up 478 basis points from a year ago and well ahead of the analyst estimate of 17.7%.

Vehicle deliveries came in at 358,023 units in Q1, a 6% increase from the same period last year. Production reached 408,386 vehicles, up 13% year-over-year.

The company also flipped to positive free cash flow, a detail that impressed some on Wall Street. Steve Sosnick of Interactive Brokers called the report “good enough for the 4% bounce.”

Musk Pumps the Brakes on Robotics Timeline

The mood shifted on the call. Musk said he doesn’t know what Optimus robot production will look like in 2026. He described the transition from Model S/X production lines to robot manufacturing as genuinely difficult.

Musk also confirmed that Tesla vehicles running the older Hardware 3 computer will not receive unsupervised full self-driving. That covers roughly 4 million Tesla owners — a notable exclusion that caught investor attention.

Capex Jump Adds to Investor Concern

Tesla said it plans to spend $25 billion on plants and equipment in 2026. That is up from prior guidance of $20 billion, and the jump added to the pressure on the stock after hours.

Despite the sell-off, the company said Optimus factory preparations at its Fremont facility will “begin shortly” in Q2. The first-generation line is designed for capacity of up to 1 million robots per year.

Tesla is also prepping Gigafactory Texas for a second-generation robot line aimed at long-term annual production of 10 million units.

On the Cybercab side, paid miles in Q1 nearly doubled from Q2. Tesla said Cybercab is expected to eventually replace the Model Y fleet as the highest-volume vehicle over time.

TSLA is down 13.8% year-to-date, making it the worst performer in the Magnificent 7 in 2026. The S&P 500 is up 4.3% over the same period.

After hours, the stock was trading around $384, down roughly 0.7% from the regular session close of $387.51.

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