Tesla posts $22.4 billion Q1 revenue, unveils $25 billion capex as Musk doubles down on AI, robotics

Tesla reported first-quarter revenue of $22.4 billion and stronger-than-expected free cash flow, even as CEO Elon Musk signalled a sharp increase in capital spending to accelerate the company’s shift toward artificial intelligence, autonomous vehicles and robotics.

The electric vehicle maker posted free cash flow of $1.44 billion for the January–March quarter, beating analyst expectations that had pointed to a cash burn of nearly the same magnitude, according to LSEG data, as reported by Reuters. The performance came despite mounting pressure on its core automotive business and intensifying competition across global EV markets.

Revenue for the quarter came in at $22.4 billion, slightly below Wall Street estimates, but still reflecting steady demand across key regions. Tesla said vehicle deliveries rose year-on-year, even as pricing pressure and the expiry of US electric vehicle incentives weighed on volumes.

Musk used the earnings call to reiterate that Tesla’s long-term strategy is shifting decisively toward autonomy. “We are going to be substantially increasing our investments in the future,” he said, adding that capital expenditure would rise “significantly” as Tesla builds out its artificial intelligence and robotics ecosystem.

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Chief financial officer Vaibhav Taneja said Tesla now expects capital expenditure to exceed $25 billion this year, marking a steep increase from earlier projections. The company also indicated it anticipates negative free cash flow for the remainder of 2026, underlining the scale of its multi-year investment cycle.

A key part of Tesla’s expansion strategy includes its Cybercab programme, with the company planning to begin volume production of the fully autonomous vehicle later this year. Tesla is also expanding its robotaxi trials in US cities, including Dallas and Houston, with further rollouts planned across Arizona, Florida and Nevada.

In a new strategic development, Tesla is also planning to integrate Intel’s advanced chip technology into its internal “Terafab” project, aimed at strengthening its AI compute and manufacturing capabilities, according to company disclosures.

Despite the aggressive spending outlook, Tesla’s financial performance benefited from lower-than-expected capital expenditure in the quarter, which came in about 40 per cent below analyst estimates. This helped offset broader margin pressures across its automotive division.

Tesla’s energy generation and storage business remained a bright spot, supported by sustained demand for grid-scale battery systems amid global energy transition efforts.

With inputs from agencies.