Tesla reported mixed second-quarter 2026 results, beating Wall Street’s revenue expectations but missing earnings estimates as the company continued ramping up investment in artificial intelligence, autonomous driving, and robotaxi expansion. Investors focused on weaker profitability and sharply higher capital spending, sending the stock down more than 4% in after-hours trading despite another quarter of strong top-line growth.
Revenue reached $28.24 billion, comfortably ahead of analyst expectations of $25.7–26.5 billion, representing 26% year-over-year growth. However, adjusted earnings per share came in at $0.33, well below the consensus estimate of approximately $0.50–0.54, while gross margin declined to 16.8%, missing expectations of 19.4%.
Tesla delivered 480,126 vehicles during the quarter, an increase of 25% from a year earlier. Automotive revenue totaled $20.52 billion, exceeding forecasts, while revenue from services and other businesses reached $4.58 billion, also outperforming expectations. The energy generation and storage division generated $3.14 billion, slightly below analyst estimates.
The company’s software business continued to expand rapidly. Active Full Self-Driving (FSD) subscriptions climbed to 1.48 million, up 56% year over year and above expectations of 1.40 million, highlighting continued customer adoption of Tesla’s driver-assistance platform. Tesla also expanded its fully driverless robotaxi service into Miami, Orlando, and Tampa, marking another step in the company’s autonomous mobility strategy.
Cash generation showed signs of improvement despite heavy investment. Free cash flow was negative $1.09 billion, considerably better than analysts’ expectations for a negative $3.64 billion. Meanwhile, capital expenditures surged 142% year over year to $5.79 billion as Tesla accelerated spending on AI infrastructure, manufacturing capacity, and autonomous vehicle development.
Regional performance was mixed. Vehicle sales in the United States declined following the expiration of federal electric vehicle tax incentives, while European demand remained strong, with Tesla reporting 108% year-over-year growth in May across the region.
During the earnings call, CEO Elon Musk declined to directly address speculation about a potential merger between Tesla and SpaceX, saying only that collaboration between the two companies continues to increase as their technologies become more closely connected.
Tesla also confirmed that it did not sell any of its Bitcoin holdings, maintaining its position of approximately $825 million worth of BTC throughout the quarter.
While the earnings miss pressured the stock, investors continue to monitor Tesla’s long-term AI strategy, robotaxi rollout, and software revenue growth as the company shifts beyond its traditional identity as an electric vehicle manufacturer.
