Tesla profit rises as the company boosts spending on self-driving and AI

In short: Tesla said quarterly profit rose 17%, and CEO Elon Musk told investors to expect much higher spending on self-driving taxis, robots, and AI chips.

What happened

Tesla reported first-quarter net income of $477 million, up from $409 million a year earlier. That is a 17% increase, but it was still below what analysts expected. Tesla said it was its second-weakest quarterly profit in five years.

Revenue rose 16% to $22.4 billion, slightly above the average estimate of $22 billion, according to FactSet. Tesla delivered 358,023 vehicles, up from 336,681 in the same period of 2025. It produced 408,386 vehicles, which left more than 50,000 unsold cars, almost double the level a year ago.

Some of the improvement came from services, which rose 42% to $3.7 billion. Energy storage revenue fell 12% to $2.4 billion.

Tesla also spent more money. Capital spending jumped 67% to $2.5 billion as it invests in AI infrastructure, including custom chips (special computer parts built for a specific job, like a custom tool instead of a general one). Musk has been talking less about selling cars and more about robotaxis, humanoid robots, and self-driving software. So far, Tesla has only run a limited robotaxi test in Texas, and it has not produced Optimus humanoid robots.

Why it matters

Tesla’s results show a company trying to fund expensive future projects while its core car business faces pressure, including rising unsold inventory. For regular people, this can affect car pricing, the pace of self-driving rollout, and how quickly new robotics products arrive. Investors reacted positively in after-hours trading, with shares up 4.5%.

Source: Financial Times