Tesla (TSLA) Shares Drop as Robotaxi Rollout Delays Counter Q1 Earnings Beat

TLDR

• NHTSA concluded its probe into 2023 Model Y steering wheel bolts without ordering a recall
• TSLA has fallen 16% since the start of the year, opening Tuesday at $378.67
• Q1 EPS surpassed estimates ($0.41 vs $0.39), but revenue fell short at $22.39B versus an expected $22.96B
• Tesla’s planned $25B in capital expenditures for 2026 may result in negative free cash flow
• Progress on Robotaxi and Optimus launches is behind schedule, maintaining investor wariness

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(SeaPRwire) –   Tesla (TSLA) secured a small regulatory victory on Tuesday, though it failed to make a significant impact.

Tesla, Inc., TSLA

The NHTSA ended its investigation into absent steering wheel bolts on approximately 120,000 2023 Model Y vehicles, determining there was no safety defect and mandating no recall. The stock showed little reaction, gaining 0.4% early before declining into negative territory.

TSLA opened Tuesday’s trading at $378.67, representing a 16% decline year-to-date. The S&P 500 was down 0.5% for the day.

Recalls seldom influence Tesla’s share price substantially. While the NHTSA investigation posed a potential concern, its uneventful conclusion provided little fuel for bullish investors.

The primary focus remains Tesla’s first-quarter earnings, released on April 22nd. The company reported earnings of $0.41 per share, exceeding the $0.39 consensus estimate. Revenue totaled $22.39 billion, missing the $22.96 billion forecast. Revenue increased 15.8% compared to the previous year.

Physical AI Slower Than Expected

The revenue shortfall alone did not trigger a major selloff. The stock is being pressured by the slower-than-anticipated advancement of Tesla’s foray into “physical AI” — specifically, its robotaxi and Optimus humanoid robot initiatives.

Tesla introduced its robotaxi service in Austin, Texas in June, but its rollout to additional cities has progressed more slowly than investors anticipated. Timelines for deploying the Optimus robot have also been extended.

Deutsche Bank analyst Edison Yu stated bluntly on Monday: “Scaling physical AI ain’t easy.” Yu has a Buy rating on the stock with a $465 price target.

Yu noted that while capital expenditure related to semiconductors and solar energy is increasing, this was adequately communicated. However, he indicated the stock would struggle to gain traction “until some of these major physical AI efforts show meaningful progress on the commercial/operational front.”

Tesla has indicated a $25 billion capital expenditure plan for 2026. Spending at that level is anticipated to turn free cash flow negative for the year, unsettling investors when it was announced.

Analysts Divided on Valuation

Wall Street opinions on Tesla are mixed. Recent price targets vary from $220 to $428. The average analyst target is $398.42, with a consensus rating of Hold. Out of 41 analysts monitored, 19 rate it Buy, 16 Hold, and 6 Sell.

Cantor Fitzgerald maintained an Overweight rating with a $510 target. Canaccord increased its target from $420 to $450, keeping a Buy rating. BNP Paribas upgraded the stock from Underperform to Neutral. HSBC started coverage with a Buy rating.

Wealthfront Advisers purchased an additional 14,419 shares in Q4, raising its total holding to 408,545 shares, worth approximately $183.7 million. Institutional investors own 66.2% of the stock.

Regarding insider activity, CFO Vaibhav Taneja sold 2,264 shares in March at $397.03 per share. Director Kathleen Wilson-Thompson sold 25,809 shares at $359.33 in late March. Insiders collectively sold 53,804 shares valued at over $20.8 million in the last quarter.

Tesla’s 50-day moving average is $385.16. Its 200-day moving average is $420.14. The stock’s 52-week trading range is between $270.78 and $498.83.