Tesla posts higher profits, signals major spending push on AI and robotics

Tesla reported a rise in first-quarter profits, beating expectations as it reaffirmed plans for heavy investments in autonomous driving, humanoid robots and artificial intelligence. The company posted profits of $477 million, up 17 percent year-on-year, while revenues climbed 16 percent to $22.4 billion.

The electric vehicle maker said it is on track to begin volume production of its Cybercab and Tesla Semi later this year, alongside record growth in subscriptions for its Full Self-Driving (FSD) driver-assistance system. Subscriber numbers rose 51 percent to 1.28 million, reflecting strong demand for the service.

Despite the solid results, investor sentiment turned cautious during a conference call after Elon Musk and executives confirmed a significant increase in spending. Tesla plans to invest more than $25 billion in 2026, higher than earlier estimates, which is expected to result in negative free cash flow during that period.

The company highlighted growing sales across Asia and South America, along with a rebound in demand in Europe, the Middle East, Africa and North America. However, it provided limited guidance on future production volumes, citing uncertainties around demand, supply chains and internal allocation decisions.

Musk said Tesla aims to roll out unsupervised Full Self-Driving technology in around a dozen US states by the end of the year, though he emphasized a cautious approach. He also noted that production of its Optimus humanoid robot would begin slowly due to the complexity of building an entirely new manufacturing line.

Shares of Tesla slipped 0.8 percent in after-hours trading, reflecting investor concerns over the scale and risks of the company’s ambitious investment plans.