Tesla is set to release its first-quarter 2026 earnings report on April 22. Here’s Morningstar’s take on what to look for in Tesla’s earnings and the outlook for its stock.
Key Morningstar Metrics for Tesla
- : USD 400.00Fair Value Estimate
- : ★★★Morningstar Rating
- : NarrowMorningstar Economic Moat Rating
- : Very HighMorningstar Uncertainty Rating
Tesla Earnings Release Date
- Wednesday, April 22, after the close of trading
What to Watch for in Tesla’s Q1 Earnings
- We will be looking for an update on the Robotaxi. In its fourth-quarter earnings shareholder deck, Tesla noted it plans to expand the Robotaxi to seven new cities in the first half of 2026, meaning service will be tested in nine total US cities. As Tesla has not yet begun offering Robotaxi rides in its new testing grounds, we hope to hear an update on the network’s progress, as well as updated timelines for new city launches and the removal of safety drivers.
- We will be listening for Tesla management’s commentary on the energy generation and storage business. First-quarter deployments were down both sequentially and year over year. We also want to hear management’s outlook on the ramp-up of its new plants.
- We hope to hear management’s plans for the Terafab joint venture with SpaceX and Intel INTC. This facility marks a major shift for Tesla to internally source most of its chips, similar to the company’s battery strategy for its electric vehicles. We hope to hear more details on the cost to build the fab, the ownership structure of the joint venture, and the timeline for chip production.
- Finally, we will be watching for an update on SpaceX’s initial public offering. Tesla is unlikely to discuss SpaceX much on the call, although it has an ownership stake in the firm, the two are partners on the Terafab, and its Optimus humanoid robots are likely key to SpaceX’s long-term growth. We will look out for any details on the IPO, such as whether shares will be allocated for Tesla shareholders to purchase, or if Tesla CEO Elon Musk sees Tesla and SpaceX working more closely together in the future.
Fair Value Estimate for Tesla
With its 3-star rating, we believe Tesla’s stock is fairly valued compared with our long-term fair value estimate of USD 400 per share, up from USD 300 following the company’s fourth-quarter earnings. The primary drivers are a higher valuation of Tesla’s robotaxis and humanoid robots, as well as increased adoption of its autonomous driving software. We forecast per-vehicle manufacturing costs to decline, profit growth in the charging business, and increased demand for energy storage systems. To fund its growth, we assume Tesla will show nearly USD 170 billion in capital expenditures over the next decade.
Read more about Tesla’s fair value estimate.
Economic Moat Rating
We award Tesla a narrow moat rating, stemming from intangible assets and cost advantage. Tesla is well-positioned as the electric vehicle market grows, leading the industry since launching the luxury Model S in 2012 and investing nearly 6% of sales in R&D to innovate further, especially in midsize cars and SUVs. As Tesla’s total vehicle volume has grown, its average cost of goods sold per vehicle has fallen; legacy automakers may take years to catch up. However, the second 10-year period carries significant uncertainty for both Tesla and the broader automotive industry, given the rapid changes in autonomous vehicle technology.
Read more about Tesla’s economic moat.
Financial Strength
We view Tesla as being in excellent financial health. Cash, cash equivalents, and investments were USD 44 billion and far exceeded its USD 8.2 billion total debt as of Dec. 31, 2025. However, total debt excluding vehicle and energy product financing (nonrecourse debt) was less than USD 5 million. With its positive free cash flow generation and large cash balance, we think Tesla’s growth will be largely self-funded. It should have no problem raising debt, if needed, to fund its robotaxi and humanoid robot segments.
Read more about Tesla’s financial strength.
Risk and Uncertainty
We assign Tesla a Very High Uncertainty Rating, as we see a wide range of potential outcomes for the company. This reflects our belief that, as an electric vehicle market leader, Tesla is subject to growing competition in an automotive market subject to sharp demand declines based on economic conditions. As it cuts prices and offers lower-cost models to compete, Tesla could see reduced profits.
The company is also investing heavily in R&D and capital expenditures to develop autonomous driving software, robotaxis, and humanoid robots, with no guarantee these investments will bear fruit. As of the last SEC filing, CEO Elon Musk owns roughly 12% of the company’s stock and uses it as collateral for personal loans, which raises the risk of a large sale to repay debt.
Tesla also faces ESG risks from potential patent litigation, product defects, and employee retention concerns, in addition to political risks related to Musk’s political activities.
Read more about Tesla’s risk and uncertainty.
TSLA Bulls Say
- Tesla could disrupt multiple industries with its technology for electric vehicles, AVs, batteries, and humanoid robots.
- Tesla’s full self-driving software should generate growing profits in the coming years as the technology continues to improve, leading to a robotaxi service and increased adoption by Tesla drivers.
- Tesla’s humanoid robot will create shareholder value as its ability to perform multiple functions will transform manufacturing and be useful to consumers.
TSLA Bears Say
- Traditional automakers and new entrants are investing heavily in electric vehicle development, which will result in Tesla seeing a deceleration in sales growth and being forced to cut prices due to increased competition, eroding profit margins.
- Tesla’s large investment in autonomous driving software will be value-destructive, as the robotaxi product will face delays and competition from Waymo, which already offers a robotaxi service.
- Tesla CEO Elon Musk’s political activities will turn consumers away from buying a Tesla in key markets, including the United States and Europe, leading to lower sales and profits.
This article was compiled by Jillian Moore.
