Tesla (TSLA) is set to report first quarter earnings after the bell on Wednesday, with Wall Street focused on the company\u2019s slow-to-evolve Robotaxi rollout and capital expenditures, which are expected to balloon due to the company\u2019s AI ventures.<\/p>\n
Analysts expect Tesla to post revenue of $22.08 billion, down 9% year over year, according to Bloomberg consensus. Tesla\u2019s 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.<\/p>\n
The key to Tesla\u2019s 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.<\/p>\n
Read more:\u00a0<\/em>Live coverage of corporate earnings<\/em><\/p>\n Prior to this expansion, Tesla only offered Robotaxi service in Austin and ride-hailing services in the San Francisco Bay Area.<\/p>\n Tesla also revealed that its service in Dallas and Houston was \u201cunsupervised,\u201d meaning no safety driver is present, which had a limited rollout in Austin.<\/p>\n The big caveats here with Tesla are that the company doesn\u2019t reveal how many Robotaxis are in the various geographic fleets at any time or how many are unsupervised.<\/p>\n Nevertheless, it is good news for Tesla bulls.<\/p>\n On Tuesday BofA Securities analyst Alexander Perry reiterated the investment bank\u2019s buy rating on the stock, and $460 price objective based on Tesla\u2019s robotaxi plans.<\/p>\n \u201cWe think investor focus for TSLA 1Q earnings will be on its robotaxi deployments, as it looks to disrupt the rideshare market and capture a portion of the $1tn+ market opportunity, and as competition accelerates with Uber & Waymo.\u201d Perry wrote in a note to clients. \u201cWe are encouraged that Tesla announced on Saturday that it had expanded its robotaxi service to Dallas & Houston.\u201d<\/p>\n Perry added the bank sees \u201csignificant embedded opportunity\u201d from robotaxis, and believes Tesla is in the early stages of monetizing its autonomy efforts.<\/p>\n Morgan Stanley predicts Tesla will soon surpass 10 billion full self-driving (FSD) miles, a milestone for the company that could lead to further breakthroughs, given the data collected.<\/p>\n Read more:\u00a0<\/em>How to avoid the sticker shock on Tesla car insurance<\/em><\/p>\n Future rollouts in new cities for Tesla\u2019s fledgling Robotaxi service will be expected, as the company\u2019s progress in this area has been slow to date, even with the expansion to Houston and Dallas.<\/p>\n<\/p><\/div>\n Also front and center for Tesla will be its capital expenditures and the company\u2019s projections for the rest of the year.<\/p>\n Tesla is projecting capex over $20 billion this year, a big jump from the $8.5 billion spent last year. This means Tesla\u2019s free cash flow (FCF) is expected to drop into negative territory as well.<\/p>\n In addition to spending on new batteries, Cybercab production, Optimus robots, and AI compute, a massive piece of the capex spend will be related to its chipmaking endeavors, a key priority for CEO Elon Musk.<\/p>\n Tesla stock jumped last week on optimism on the chip front, with CEO Elon Musk claiming early Wednesday that Tesla was \u201ctaping out,\u201d 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.<\/p>\n Chips like the AI5 would be produced at Tesla\u2019s upcoming Terafab facility, though analysts warn a move to create its own \u201cfab\u201d is highly ambitious and likely a massive engineering, as well as financial challenge.<\/p>\n Musk is also reportedly asking his team to push up production. Despite the call for \u201clight-speed\u201d movement, Tesla sources told Bloomberg that the fab will begin manufacturing silicon by 2029 and then scale up.<\/p>\n Adding to the challenge, Bernstein analysts claimed the entire project would require capital spending of $5 trillion to $13 trillion, an almost unimaginable sum.<\/p>\n It all adds up to an interesting report and earnings call on Wednesday.<\/p>\n And there\u2019s still the core auto business, which reportedly may see a cheaper model joining Tesla\u2019s aging product portfolio.<\/p>\n Earlier this month, Tesla reported Q1 deliveries of 358,023 vehicles globally, versus 364,645 expected, up 6.3% year over year. However, the company\u2019s total from last year was down due to the changeover to the new Model Y, meaning Q1 results from last year were unusually low.<\/p>\n Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on<\/em> X<\/em><\/a> and on<\/em> Instagram<\/em>.<\/em><\/p>\n Click here for the latest stock market news and in-depth analysis, including events that move stocks<\/p>\n Read the latest financial and business news from Yahoo Finance<\/p>\n<\/p><\/div>\n<\/div>\n<\/div>