Tesla has reported its earnings for the first quarter of 2026. The automaker is reporting $22.4 billion in total revenue, a 16 percent year-over-year increase, and $0.41 earnings per share (non-GAAP).
Those beat market expectations of $22.3 billion in revenue, 14% growth, and $0.27 earnings per share. Tesla had one of its worst quarters in recent memory in Q1 2025, when it made $19.3 billion in revenue.
However, as the company previewed earlier in April, deliveries fell short of targets. The company moved a total of 358,023 cars in Q1 2026, or about 7,600 vehicles short of the expected volume. It also made more than 50,000 unsold EVs, suggesting the company might reduce production in Q2 (April to June) to clear inventory.
Tesla’s Q1 2026 revenue is up despite poor sales
A tariff refund and higher selling prices helped
Tesla partly credited the better-than-expected Q1 2026 results to “one-time benefits related to warranty and tariffs.” The company may have received a tariff refund in light of a court ruling overturning government policies. The firm also touted lower material costs and a tariff-related energy benefit.
However, the EV company also pointed to higher average selling prices as well as increases in Full Self-Driving purchases (1.28 million customers have bought or subscribed to the package). The gross profit margin climbed from 16.3 percent at the start of 2025 to 21.1 percent a year later. Shoppers are choosing more expensive configurations, even if there aren’t as many as Tesla hoped.
The subpar deliveries, meanwhile, might come from a rough overall EV market. Cox Automotive found that sales in the U.S. dropped 27 percent year-over-year in the first quarter as the end to the federal EV tax credit limited demand. Tesla took a relatively mild blow as its sheer size and the refreshed Model Y helped it gain market share, but it still faced an eight-point decline.
What’s next for Tesla in Q2 2026?
The company is still betting on AI and the Semi
In its outlook for Q2 2026, Tesla declined to shared numbers and instead provided general expectations. Deliveries would be affected by “aggregate demand” and the supply chain, the company said.
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It’s also still counting on an “acceleration” of profits from AI, fleet, and software sources. The company still expects to start Cybercab production this year, and is ending sales of the Model S and Model X to repurpose its Fremont factory for Optimus humanoid robots. Semi electric trucks and Megapack 3 energy storage are also going into volume production this year.
Will we learn more during the earnings call?
While Tesla’s Q1 2026 earnings call has not been completed as of this writing, we wouldn’t count on the company saying much more. It’s reportedly back to making a more affordable EV despite CEO Elon Musk downplaying it in 2024, but there’s been no official confirmation. The rumored car is still believed to be in the early stages and wouldn’t be ready in time to influence 2026 results.
Source: Tesla
