Tesla Stock Price Rises as 2026 Capex Reaches $25 Billion
Tesla stock price stayed under pressure, with shares still down nearly 20% from their December 2025 highs, even as first-quarter 2026 results beat adjusted earnings and free cash flow expectations. Management also raised 2026 capital spending guidance to about $25 billion, a sharper step up from the roughly $20 billion plan it had laid out earlier.
For holders of TSLA, the message is split: the core business still threw off cash in the quarter, but the company is now committing more money to the next phase of buildout. That means more capital tied up in factories, chips, autonomy hardware, and production lines before those bets can feed earnings again.
Tesla Q1 Beats on EPS
$0.41 in adjusted EPS gave Tesla a small but clear beat against the Street’s roughly $0.37 estimate. Revenue came in at $22.39 billion, below the $22.64 billion estimate, so the profit line held up even though top-line growth did not fully clear expectations.
$16.23 billion of automotive revenue showed the core car business remained the largest piece of the quarter, while deliveries reached 358,023 vehicles. Automotive gross margin excluding credits came in at 19.2%, well above the 15.4% estimate, which helped explain how the company beat on earnings despite missing on revenue.
Free Cash Flow Tops Forecasts
$1.44 billion in free cash flow and $3.94 billion in operating cash flow gave Tesla breathing room for a larger spending plan. The quarter’s cash generation matters because the company is asking the business to support a heavier investment cycle at the same time it is pushing into autonomy, robotics, and energy storage.
Nearly 1.3 million paid Full Self-Driving subscribers globally, up from 1.1 million in the prior quarter, added another data point to the autonomy push. Paid Robotaxi miles nearly doubled sequentially in the first quarter, while Tesla is targeting unsupervised FSD release in the fourth quarter of 2026.
$25 Billion Capex Plan
$25 billion in 2026 capex is now the figure to watch, up from about $20 billion before. Tesla said the money is aimed at six factory buildouts, AI infrastructure, the AI5 chip program, Cybercab and Semi production, Megapack 3, and Optimus production lines, which makes the spending plan broader than a routine manufacturing refresh.
Roughly a dozen U.S. states is the target for Robotaxi expansion by year-end 2026, with safety drivers already removed in Dallas and Houston. Tesla has also received approval in the Netherlands, expects an EU-wide review in May, and is targeting China approval by the third quarter of 2026.
That spending path leaves the clearest near-term test in whether Tesla can keep cash flow positive while the company pushes more money into its physical AI platform. If the newer lines and autonomy programs scale as planned, the capex bill looks like an expansion bet; if not, the quarter’s cash cushion will have to carry a lot more weight.
