Tesla Q1 Earnings Preview: Robotaxi Delays and SpaceX Merger Speculation Grow

Tesla’s upcoming first-quarter earnings report, expected Wednesday, may do little to ease investor concerns about the company’s long-promised robotaxi strategy. According to analysts at Jefferies, the widening gap between Tesla’s ambitious vision and its current execution could intensify speculation about a potential merger with SpaceX.

Jefferies analysts, led by Philippe Houchois, noted that unless Tesla delivers a strong and credible update on its robotaxi rollout, doubts around funding and long-term strategy could increase. This uncertainty may revive discussions about whether combining Tesla with SpaceX could create strategic advantages. The firm maintained a Hold rating on Tesla stock while raising its price target from $300 to $350.

For the first quarter, Jefferies forecasts Tesla revenue at $21.2 billion, reflecting a 10% year-over-year increase but a decline from the previous quarter. Operating margins are expected to fall below 3%, alongside an estimated cash burn of $1.9 billion. Looking ahead, the outlook remains challenging, with projections of negative free cash flow reaching approximately $5.5 billion by 2026 as capital expenditures rise sharply to around $19–20 billion annually.

Tesla’s robotaxi ambitions remain a key focus for investors. The company has suggested it could launch services in 25% to 50% of potential U.S. markets by year-end. However, analysts believe this timeline is overly optimistic due to regulatory hurdles and ongoing concerns about Tesla’s lidar-free Full Self-Driving (FSD) technology. As a result, Jefferies does not expect meaningful robotaxi revenue until at least 2027.

Similarly, Tesla’s humanoid robot initiative faces long-term challenges, with increasing competition and uncertain commercialization timelines. Despite these hurdles, Tesla’s vertically integrated model and ability to scale production remain competitive advantages.

In terms of valuation, analysts emphasize that Tesla stock continues to be driven more by market sentiment and confidence in innovation than by traditional financial metrics, making its future performance highly dependent on execution and technological breakthroughs.