Tesla reported its first-quarter earnings on Wednesday, revealing a mixed financial performance that failed to lift its struggling stock. The company posted earnings of 41 cents per share, beating Wall Street's estimate of 37 cents, but revenue fell short at $22.39bn against the expected $22.6bn. Free cashflow was positive, but the overall figures did little to reassure investors.
Chief executive Elon Musk used the earnings call to outline Tesla's pivot towards artificial intelligence, humanoid robots and self-driving robotaxis, though his tone was notably subdued. He acknowledged that 'significant effort and hard work' is needed to achieve the company's goals, even as he repeated claims that its robotics and autonomous vehicle products would transform society. Several investors pressed for clarity on the timeline for these projects.
Tesla's core automotive business continues to face headwinds. The company delivered around 358,000 vehicles in the first quarter, below analyst projections, and has been hit by declining demand in the US after the Trump administration ended a key tax credit for electric vehicles. Tesla also discontinued its Model S and Model X flagship models earlier this year, while its Cybertruck has failed to achieve strong sales. The company is reportedly developing a smaller, cheaper electric car to compete with Chinese rivals such as BYD.
Despite Musk's grand promises, Tesla's stock has fallen about 11% so far this year, lagging behind other mega-cap tech companies. The company's self-driving cars are already operating in several Texas cities, and preparations are under way to launch robotaxis in three Florida cities and Las Vegas. However, tangible revenue from these initiatives remains elusive, and investor patience is wearing thin.
Meanwhile, attention is shifting to Musk's other ventures, particularly SpaceX, which confidentially filed for an initial public offering this month with a valuation of $1.75tn. Tesla shareholders voted in November to award Musk a $1tn pay package, but the company's future now hinges on the success of its AI and robotics bets.
