Tesla Reports Increased Q1 Profits Amid Rising AI Investments

Tesla reported a 17% increase in first-quarter profits, reaching $477 million, with earnings per share at $0.41, surpassing Wall Street's expectations of $0.39. Revenue rose to $22.39 billion, led by a 16% increase in automotive revenues.

The company delivered 358,023 electric vehicles during the quarter. However, profits and revenue remain below their peak as European and Chinese competitors gain market share. In 2025, Tesla lost its position as the world's largest EV maker to China's BYD.

CEO Elon Musk emphasized Tesla's focus on artificial intelligence, including the development of humanoid robots and autonomous vehicles. The company has discontinued its Model S sedan and Model X crossover to reallocate resources toward the Optimus robot, now being produced at the Fremont, California factory.

Musk announced plans to break ground on a new factory in Texas for the Optimus robots, with a potential capacity of producing 10 million units annually.

The company is also investing heavily in its transition, with $2.5 billion spent in capital expenditures last quarter, up 67% from the previous year. Musk warned of a significant increase in future spending.

Shares fell 1% in after-hours trading following the earnings report.