Robotaxi rollout, mega capex spending in focus
Tesla (TSLA) will report first-quarter earnings after the bell on Wednesday, with Wall Street focused on the company’s slow-to-evolve robotaxi rollout and cap-ex spending, which is expected to balloon due to its AI ventures.
Analysts expect Tesla to post revenue of $22.08 billion, down 9% year over year, according to Bloomberg consensus. Tesla’s adjusted EPS is expected to come in at $0.35, with adjusted EBITDA projected for $3.217 billion, down 14.4% versus Q1 last year.
The key to Tesla’s growth is the rollout of its robotaxi service. Over the weekend, the company said it had expanded robotaxi service to parts of Dallas and Houston.
Prior to this expansion, Tesla only offered robotaxi service in Austin and ride-hailing services in the San Francisco bay area.
Tesla also revealed its service in Dallas and Houston was “unsupervised,” meaning no safety driver present, which had a limited rollout in Austin.
The big caveats here with Tesla is that the company doesn’t reveal how many robotaxis are in the various geographic fleets at any time, or how many robataxis are unsupervised.
Nevertheless, it is good news for Tesla bulls.
Morgan Stanley predicts Tesla will surpass 10 billion full-self-driving (FDS) miles shortly, a milestone for the company that could lead to more breakthroughs, given all the data collected.
Future rollout plans of new cities for Tesla’s fledgling robotaxi service will be expected, as the company’s progress in this area has been slow to date, even with the expansion to Houston and Dallas.
Also front and center for Tesla will be its capex spending, and what the company projects for the rest of the year.
Tesla is projecting over $20 billion in cap-ex spending this year, a big jump from the $8.5 billion spent last year. This means Tesla’s free cash flow (FCF) is expected to drop into negative territory as well.
In addition to spending on new batteries, Cybercab production, Optimus robots, and AI compute, a massive piece of the cap-ex spend will have to do with its chipmaking endeavors, a key priority for CEO Elon Musk.
Tesla stock jumped last week on optimism on the chip front, with CEO Elon Musk claiming early Wednesday that Tesla was “taping out,” or had completed the final stage of the chip design process for its upcoming AI5 chip, destined for future EVs, massive training clusters, and Optimus.
