Tesla is back to year-over-year growth, if you don’t look at EV sales
Tesla has reported its results for the first quarter of 2026. The automaker reports total revenue of $22.4 billion, an increase of 16% year-over-year and earnings per share of $0.41 (non-GAAP).
These exceeded market expectations of revenue of $22.3 billion, growth of 14% and earnings per share of $0.27. Tesla had one of its worst quarters in recent memory in the first quarter of 2025, with revenue of $19.3 billion.
However, as the company announced earlier in April, deliveries fell short of targets. The company moved a total of 358,023 cars in the first quarter of 2026, approximately 7,600 vehicles less than the planned volume. It also manufactured more than 50,000 unsold electric vehicles, suggesting the company may cut production in the second quarter (April to June) to clear inventory.
Tesla’s Q1 2026 revenue up despite poor sales
A duty refund and higher sales prices helped
Tesla attributed the better-than-expected first-quarter 2026 results in part to “one-time warranty and pricing benefits.” The company may have received a customs duty refund in light of a court ruling overturning government policy. The company also touted lower material costs and an energy pricing advantage.
However, the electric vehicle company also highlighted higher average sales prices as well as increased purchases of Full Self-Driving (1.28 million customers purchased or subscribed to the package). The gross profit margin increased from 16.3 percent at the start of 2025 to 21.1 percent a year later. Buyers are choosing more expensive configurations, even if there aren’t as many as Tesla hoped.
Below-average deliveries, meanwhile, could stem from a tough overall electric vehicle market. Cox Automotive found that U.S. sales fell 27% year over year in the first quarter as the end of the federal electric vehicle tax credit limited demand. Tesla took a relatively light hit as its size and 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 still focuses on AI and Semi
In its outlook for the second quarter of 2026, Tesla declined to share numbers and instead provided general expectations. Deliveries would be affected by “overall demand” and the supply chain, the company said.
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It also still counts on an “acceleration” of profits from AI, fleet and software sources. The company still plans to start production of the Cybercab this year and is ending sales of the Model S and Model X in order to readapt its Fremont factory to Optimus humanoid robots. Megapack 3 semi-electric trucks and energy storage will also enter volume production this year.
Will we know more during the earnings call?
Although Tesla’s Q1 2026 earnings call has not been completed as of this writing, we don’t expect the company to say much more. It will reportedly return to making a more affordable electric vehicle, although CEO Elon Musk has downplayed it in 2024, but there has been no official confirmation. It is believed that the car is still in its early stages and would not be ready in time to influence the 2026 results.
Source: Tesla
