Tesla profit rises, but robot and AI spending plan expands

Tesla is showing profit and cash today, but Elon Musk is asking investors to bankroll a much larger gamble on humanoid robots and artificial intelligence. On its first-quarter call, the company said capital expenditures would rise to above $25 billion in 2026, up from a prior plan of more than $20 billion, as it prepares to begin work in the second quarter on its first large-scale Optimus factory.

The scale of the robot push is striking. Tesla said the first-generation Optimus production line in Fremont, California, is designed for 1 million robots a year and will replace the Model S and Model X lines there. A second-generation line is planned for Gigafactory Texas, with capacity for 10 million robots annually. Musk said Optimus would be Tesla’s biggest product ever, underscoring how much of the company’s growth story is now centered on a business that is still being built.

Investors initially pushed the stock lower in extended trading, a sign of unease over the cash burden even after Tesla posted positive free cash flow and a surprise earnings beat for a second straight quarter. The company’s revenue rose 16% from a year earlier to $19.3 billion, but the new spending plan suggests the near-term gains from its core business may be increasingly overshadowed by the cost of future bets.

Tesla’s auto results still point to a business that is moving significant volume, but not without pressure. In the first quarter, the company produced 408,386 vehicles and delivered 358,023, while deploying 8.8 GWh of energy storage products. Tesla also said revenue from its energy storage business fell 12% from a year earlier, even as it pointed to a rebound in electric vehicle demand. That split matters: the car business remains the financial foundation, but margin pressure and heavy investment needs continue to shape the outlook.

Musk also said Tesla’s robotaxi service in Austin, Texas, remained on track to begin in June, keeping alive another major promise that could redefine the company if it works. For now, Tesla is asking the market to accept a familiar trade-off: stronger current results in exchange for a far more expensive push into robotaxis and humanoid robots, two areas that could eventually transform the business but will consume more capital long before they contribute meaningful profits.