Tesla Q1 revenue rises, driven by EV sales and FSD subscriptions

Tesla saw an uptick in revenue and profit year-over-year, figures buoyed by an increase in automotive revenue and other services, including subscriptions to its Full Self-Driving advanced driver assistance system, which reached 1.28 million.

Tesla shares rose 4% in after-hours trading following the release of its first-quarter earnings report, driven by its free cash flow, and increases in revenue and profit on a year over year basis.

The company reported Wednesday revenue of $22.38 billion, a 16% increase from the $19.3 billion it generated in the first quarter of 2025. Its automotive revenue also rose to $16.2 billion, compared to $13.96 billion in the same year-ago period. The company also reported positive free cash flow ‌of $1.44 billion.

That pop in revenue, which met expectations of analysts’ surveyed by Yahoo Finance, provided a bit of good news for the company, which has grappled with lagging EV sales. Tesla delivered 358,023 EVs globally in the first three months of the year, below analysts’ expectations of around 368,000. The company also produced 408,386 vehicles during that same period, far more than it delivered.

Tesla’s business hit considerable headwinds in 2025 causing profits to fall 46% year-over-year to $3.8 billion. The dip was primarily due to lower EV sales — a problem other automakers also faced after the Trump administration ended the $7,500 federal tax credit for electric vehicles. 

Tesla’s first-quarter results, while positive in year-over-year terms, still shows some weakness when the previous three quarters are taken into account. The company’s fourth-quarter revenue was $24.9 billion and its third-quarter revenue was $28 billion, a figure propped up by consumers who bought an EV before the tax credit expired.

The first quarter results also illustrate a company that still relies on its traditional EV business, along with service and subscriptions, and is not yet benefitting from its future bets on AI and robotics.

Tesla’s net income was $477 million, compared to the $409 million in the first quarter of 2025.  That Q1 2025 profit figure was notably off the mark, a 71% drop from the same period in 2024. Like the revenue story, Tesla’s first quarter profits are still notably lower than the past three quarters. The company’s fourth-quarter profit was $840 million and its third-quarter income was $1.37 billion. 

Tesla CEO Elon Musk has repeatedly warned that the company is in an awkward and potentially financially painful transition from its core EV business to an AI and robotics company. It has yet to scale production of its Optimus humanoid robot, which will be produced at its Fremont, California factory or meaningfully ramp up its robotaxi service. The company currently operates a limited robotaxi service without a human safety operator in Austin. It recently started operating that service in Dallas and Houston, but access to those vehicles remains severely limited.