Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%.
Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Record second-quarter vehicle deliveries and growth across the energy and services businesses supported the top line. Deliveries increased 25% to 480,126 vehicles.
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Tesla’s Revenue Growth Broadens Across Businesses
Automotive revenues rose 23% year over year to $20.52 billion. Automotive sales increased to $20.01 billion from $15.79 billion, while leasing revenues declined to $364 million from $435 million. Regulatory credit revenues fell sharply to $146 million from $439 million.
Energy Generation and Storage revenues grew 13% to $3.14 billion. Services and Other revenues jumped 50% to $4.58 billion, reflecting higher activity across used vehicles, Supercharging, service centers and insurance. Higher Full Self-Driving subscriptions also aided automotive ancillary sales.
Tesla Deliveries Set a Q2 Record
Tesla produced 451,758 vehicles, up 10% from the prior-year quarter. Model 3/Y production increased 12% to 442,936 units, while production of other models declined 34% to 8,822 units.
Model 3/Y deliveries rose 25% to 467,762 vehicles, while other-model deliveries increased 19% to 12,364 units. Global vehicle inventory improved to 15 days of supply from 24 days a year earlier. The company exited the quarter with its largest order backlog since 2023.
TSLA Software and Energy Metrics Gain Momentum
Active paid FSD subscriptions increased 56% year over year to 1.48 million. Tesla achieved record FSD subscription additions and more than 55% of its North American deliveries included an FSD subscription at the time of purchase.
Energy storage deployments climbed 41% to 13.5 GWh, marking Tesla’s second-highest quarterly deployment volume. The company also expanded its charging network to 8,704 Supercharger stations and 82,357 connectors, representing increases of 18% and 17%, respectively.
Tesla Margins Contract as Expenses Climb
Gross profit rose 23% to $4.75 billion, but the GAAP gross margin contracted 41 basis points to 16.8%. Operating expenses surged 47% to $4.35 billion, driven by research and development spending related to AI, Cybercab, Optimus and Tesla Semi, as well as higher stock-based compensation and selling and administrative costs.
Operating income declined 57% to $398 million, reducing the operating margin to 1.4% from 4.1%. Automotive gross margin excluding regulatory credits was 16.3% compared with 15% a year earlier and 19.2% in the preceding quarter.
Energy gross margin fell to 20.4%, partly due to a roughly $240 million warranty charge tied to vendor battery-cell issues and the absence of prior-quarter tariff benefits. Services and Other gross margin improved sequentially to a record 14.1%, supported by higher volumes and better fleet cost management.
TSLA Cash Flow Reflects Heavy Investment
Net cash provided by operating activities increased 85% to $4.70 billion. However, capital expenditures more than doubled to $5.79 billion from $2.39 billion, resulting in negative free cash flow of $1.09 billion.
As of June 30, 2026, cash, cash equivalents and short-term investments totaled $43.52 billion, up 18% year over year but down $1.22 billion sequentially. Long-term debt and finance leases, excluding the current portion, were $7.92 billion.
Tesla Outlook Prioritizes AI and New Products
Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. Planned investments include Robotaxi fleet expansion, Optimus production capacity, semiconductor manufacturing, solar production and AI computing infrastructure.
Cybercab production has begun at Gigafactory Texas, while Tesla Semi and Megapack 3 remain scheduled to enter production in 2026. The company is installing first-generation Optimus production lines and expanding Robotaxi operations.
TSLA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Autoliv ALV reported second-quarter 2026 adjusted earnings of $2.43 per share, which increased 10% year over year and came above the Zacks Consensus Estimate of $2.34 by 3.85%. Net sales rose 3.3% to $2.80 billion, topping the consensus estimate of $2.76 billion by 1.45%. Autoliv maintained its 2026 guidance for roughly flat organic sales, an adjusted operating margin of 10.5-11% and operating cash flow of around $1.2 billion. Autoliv’s capital expenditure, net, is expected to remain below 5% of sales.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
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Tesla, Inc. (TSLA) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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