To The Moon

The Bottom Line

$Tesla Motors(TSLA)$ reported Q1 2026 results after the close on April 22, and the numbers came in ahead of expectations on nearly every metric.

• Total revenue hit $22.4 billion, up 16% year over year and roughly 6% above Goldman Sachs' estimate of $21.2 billion.

• Profitability surprised: non-GAAP EPS came in at $0.41, well above Goldman's forecast and $0.06 ahead of the Street consensus at $0.35.

• Free cash flow was $1.44 billion, a sharp reversal from prior consensus views of negative or breakeven generation. Cash, cash equivalents, and investments rose $0.7 billion QoQ to $44.7 billion.

  

Auto Revenue & Margins: Higher ASPs Drove the Beat

• Tesla's automotive revenue hit $16.2 billion, up 16% YoY and roughly $770 million above GS' forecast, driven by an implied ASP of roughly $43.6K. Deliveries came in at the already-reported ~358K units.

• Automotive gross margin excluding regulatory credits hit 19.2%, a 370 basis point beat over GS' 15.5% estimate and above StreetAccount (15.4%) and FactSet (~16.2%).

• Goldman cautions that the shareholder deck cites one-time benefits — specifically warranty adjustments and tariff-related items — as tailwinds to margins, and notes that "better understanding the driver and size of those benefits will be important to better assess the results."

Energy, Services & FSD: Business Highlights

• Energy gross margin was a standout at 39.5%, crushing GS' 25.0% estimate and making Energy Tesla's highest-margin segment for the quarter. Energy Generation and Storage revenue was $2.4 billion on 8.8 GWh deployments. The shareholder letter cites one-time tariff benefits here as well.

• Service and Other revenue surged 42% YoY to $3.7 billion, beating GS by nearly $500 million ($3.3bn estimate) — diversifying Tesla beyond hardware with recurring-like Supercharging, insurance, and service revenue.

• Paid Full Self-Driving (FSD) users grew to ~1.3 million from 1.1 million in Q4 2025, achieving record net new subscriptions in the quarter.

• Tesla highlighted progress on FSD, Robotaxi, and Optimus as key topics, with further updates expected on the earnings call. Robotaxi launched unsupervised rides in Dallas and Houston in April, with more metros planned. Cybercab, Tesla Semi, and Megapack 3 remain on schedule for volume production in 2026.

The Catch: Inventory, Margins, and a Stretched Valuation

• Production outpaced deliveries by ~50K units — Tesla produced ~408K vehicles but delivered only ~358K, pushing inventory dollars up $2.0 billion QoQ to $14.4 billion. Days of supply rose to 27 days from 15 days in Q4 2025.

• Goldman maintains a Neutral rating with a 12-month price target of $375 (~3% below the ~$387 post-earnings level), valuing Tesla at roughly 150x forward EPS

  

💬 Discussion

Tesla beat on revenue, margins, and cash flow — but one-time benefits and a production-to-delivery gap raise questions about what happens next. Here's what the community is debating:

• With one-time benefits inflating Q1 margins, do you trust the 19.2% auto gross margin as sustainable?

• Tesla has ~50K extra cars in inventory. Price cut or hold firm — which is more stock-friendly?

• Robotaxi scaling vs. new vehicle launches: which catalyst moves the stock more in second-half of 2026?

Looking forward to your comments below! Stay tuned for more earnings debriefs!

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