The focus could be more on Tesla's story for the future than the numbers in its results.
When Tesla reports quarterly earnings on Wednesday, the numbers could once again play second fiddle to narrative details about the company's futuristic forays into robotaxis and humanoid robots.
The results "will show further widening of the gap between vision and execution" and might fuel funding concerns, Jefferies analyst Philippe Houchois said in a note to clients this week.
Houchois added that the results may "raise the logic" of an eventual merger with SpaceX, the rocket maker controlled by Tesla CEO Elon Musk.
Wall Street expects Tesla Motors to report first-quarter adjusted earnings per share of 37 cents, up from 27 cents in the same period last year, according to the FactSet consensus. The company is also expected to record revenue of $22.2 billion, a 15% increase compared to a year earlier, and earnings before interest, taxes, depreciation and amortization (Ebitda) of $3.2 billion, a 17% jump, according to FactSet.
Tesla has already reported electric-vehicle sales and energy-product deployments below what Wall Street had expected. But EV sales - despite being the cash engine fueling Tesla's massive ambitions - have become less of a concern for investors, who are now preoccupied by Tesla's robotaxi service.
Robotaxi expansion too slow for some investors
Over the weekend, Tesla expanded its robotaxi service to include parts of both Dallas and Houston. Previously, it was only available in Austin, Texas, and California's San Francisco Bay Area. The expansion is the first major sign of growth for Tesla since January, when it began offering limited unsupervised rides in Austin.
However, Texas has taken a friendly regulatory approach to autonomous vehicles, which makes expansion easier there than in other states. And while Tesla is advertising its operations in Dallas and Houston as unsupervised, its service appears limited: Just four vehicles have been tracked across the cities, according to a crowd-sourced effort.
Tesla has said it aims to offer services in at least nine cities by the end of June, including Las Vegas and a trio of cities in Florida. In a note to clients earlier this month, UBS analyst Joseph Spak said he doesn't expect to see "meaningful scaling" in Tesla's targeted cities. He rates Tesla at neutral with a $352-per-share price target.
"We believe the technology continues to improve and that infrastructure will be built, but we believe Tesla will roll out more slowly given their safety culture," Spak wrote. "They have to make sure the product works very well given the importance to the future of the company."
Some investors appear to be getting impatient, pointing to Musk's lofty promises about the rollout. Last July, for example, he claimed Tesla would offer robotaxi ride-hailing services to about "half" of the U.S. population by the end of 2025.
"Why is the rollout of the robotaxi network so slow?" asked one Tesla investor, backed by 275,000 shares, in a post on the company's investor platform. "Why are you behind on guidance from <90 days ago?" asked another shareholder.
Improving its robotaxi service is "critical" to justifying Tesla's sky-high valuation, according to Morgan Stanley. Tesla's stock has often been criticized for trading largely on sentiment rather than business fundamentals.
Analysts expect the Terafab to fuel capex growth
The stock price has fluctuated from as low as $229.85 per share to as high as $498.83 a share over the past 12 months. Tesla shares fell 1.6% on Tuesday, closing around $386 a share.
Tesla expects to book at least $20 billion in capital expenditures this year, which would make 2026 its most expensive year to date. In 2025, for example, the company reported $8.5 billion in capex.
But analysts expect Tesla to report full-year capex well beyond $20 billion, since that guideline doesn't account for costs associated with a few projects - namely, a massive chip-making operation called the Terafab and a potential solar-energy plant.
While it's unclear how much the Terafab could cost Tesla, Barclays estimates it could take between $5 trillion and $13 trillion to fully materialize. SpaceX is working with Tesla on the project, as is Intel and Super Micro Computer.
Morgan Stanley's Andrew Percoco said he can see capex growing to between $25 billion and $35 billion and, at capex of $21 billion, estimates negative free cash flow of $8.4 billion for 2026. Wall Street expects a consensus negative free cash flow of more than $4.7 billion, according to FactSet.
"Even with consensus 2026 free-cash-flow estimates coming down, Tesla still has one of the strongest net cash positions in the industry and the balance-sheet flexibility to fund every one of those bets simultaneously - and that's what justifies the premium," Granite Shares CEO Will Rhind, whose firm offers several exchange-traded funds tied to Tesla, told MarketWatch over email.
Shareholders question the Optimus timline
During Tesla's earnings call, set to be held after it reports earnings on Wednesday afternoon, Musk and other executives will answer questions from investors. According to Say Technologies, which operates Tesla's investor platform, the top question on shareholders' minds is the timeline for Optimus, the company's humanoid robot.
"When will we have the Optimus v3 reveal?" an investor backed by 2.2 million shares asked, referring to the latest version of the humanoid robot. "When will Optimus production start since we ended the Model X and S production earlier than midyear?"
Musk had previously said that the Optimus robot would be shown off to investors in March, before delaying the reveal to work out some kinks. In January, he said the robots would be up for sale to the public by the end of 2027, with production set to begin later this year - partially on production lines previously used for some EVs.
"By 2028, we should really start to see the transformation start to show up in financials" as Tesla starts generating revenue from robotaxis and robots, Morningstar analyst Seth Goldstein told MarketWatch.
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