To The Moon

Round Up.

The wait is finally over - $Tesla Motors(TSLA)$ handed in its earnings report card on Wed, 22 Apr 2026 after US market closed for the day.

Is it a stellar set of numbers ? I reserve my comments for later.

At worse, it’s a mixed results for the premium auto-maker.

Let’s take a look at what has been reported so far, and out in the media.

Q1 2026 Earnings.

Below is TSLA most recent earnings with comparisons to estimates from analysts polled by LSEG and Q1 2025’s data.

Wall Street’s expectations represent a return to YoY growth for TSLA after several quarters of decline, with roughly +14% for revenue growth and +33% for EPS growth.

Tesla EPS for Q1 2026

Earnings per share Non-GAAP (EPS):

• It came in at $0.41 vs $0.37 cents expected; that’s a +10.81% above estimates.

• Versus Q1 2025’s $0.27; that’s a +51.85% YoY gain. (see above)

Revenue:

• Topline was $22.39 billion vs analysts’ expectation of $22.64 billion; falling short of expectations by -1.10%.

• Versus Q1 2025’s $19.34 billion; that’s a +17.06% YoY gain.

Other Reporting Numbers.

• Net income (GAAP) : was $477 million vs Q1 2025’s $409 million; that’s a +9.29% YoY gain.

• Operating income: was $941 million vs Q1 2025’s $399 million; that’s a staggering +135.84% YoY gain. (see below)

• Free cash flow (FCF) : rose to $1.44 billion vs Q1 2025’s $664 million; that’s a +117.47% YoY increase. (see below)

• Automotive Gross margins (excluding sales of environmental regulatory credits): , came in at +19.2% vs Q1 2025’s +12.5%; that’s a +6.7% YoY gain.

• Capital expenditure : rose by a whooping +67% to $2.49 billion vs Q1 2025’s $1.49 billion; that’s a +67.1% YoY increase.

• CFO Taneja confirmed that 2026 capex will top $25 billion, up from Q4 2025’s forecast of $20 billion and an increase from $8.6 billion in 2025.

Earnings Analysis.

At first glance, the numbers looked impressive. However, dig into the shareholders’ letter and a pattern emerges.

TSLA has pulled every accounting & financial lever available to make a stagnant quarter looks like a turnaround.

Instead of selling more cars or cutting production costs (that boost topline), TSLA has relied on several one-time ‘creative’ accounting practices to make Q1 2026 looks like a success:

(1) One-Time Windfalls:

• The biggest boost to profit came from "one-time benefits" related to warranties & tariffs.

• TSLA has moved “old” money back into active accounts and booked expected government refunds as income.

(2) Warranty Accounting:

• TSLA likely took money previously accrued for car repairs (warranty reserves) and counted it as profit.

• This boosted current quarter’s margins, making it look “better”, when in actuality, it does not represent new sales.

(3) Tariff Refunds:

• The tariff monies most likely came from SCOTUS’s 20 Feb 2026 ruling that overturned Trump’s enforcement of IEEPA tariffs, that let importers get back about $175 billion total.

• US Customs has opened a refund site on 20 Apr 2026, 2 days before TSLA’s earnings.

• TSLA has probably accounted the expected refunds for imported car parts and energy businesses, giving a quick one-off (refund) profit bump for Q1 2026.

• Although CFO Taneja subsequently clarified it weren't "IEEPA" tariffs, nevertheless, it is still a $250 million one-time boost that would not happen again.

Collectively these one-time “increase in automotive benefits related to warranty and tariffs.” are listed as the #1 profitability drivers for Q1 2026; ahead of actual car sales or FSD software revenue.

This clearly signals that TSLA’s core business of making and selling cars is not actually growing.

(4) Stretch Supplier Payments

TSLA’s balance sheet showed another strategy (a classic cash flow management technique) used to boost their earnings numbers.

• Accounts payable (AP) - money TSLA owes to its suppliers, rose from $13.371 billion (Q4 2025) to $14.696 billion (Q1 2026), a massive increase of $1.325 billion in unpaid bills.

• Meanwhile, Accounts receivable (AR) - money customers owe Tesla dropped from $4.576 billion to $3.959 billion.

• The clearest sign of this strategy is "days payable outstanding" (DPO) has jumped from 61 to 71 days, in one quarter.

• This means TSLA is taking 10 days longer to pay its suppliers than it did before.

• By delaying payments, TSLA keeps more cash within, making its financial position look stronger on paper.

• The “extra” $1.325 billion (in AP) stayed on TSLA's balance sheet, contributing to reported FCF of $1.44 billion. Without it, FCF would appear much weaker.

• Delaying payment also boosted operating cash flow to $3.937 billion, up +83% YoY, an impressive headline number.

• In short, TSLA is effectively borrowing from its supply chain to make its cash generation look stronger.

(5) Increased Borrowings.

• TSLA’s shareholders’ letter has quietly mentioned that a $0.7 billion increase in its cash position.

• It came from $1.4 billion FCF and $1.2 billion financing cash inflow, partly offset by $2.0 billion for the SpaceX equity investment.

Breakdown of the $1.2 billion financing:

• In Q1 2026, TSLA has issued $4.331 billion in new debt; more than 3x the $1.354 billion issued in Q4 2025.

• After $3.530 billion in debt repayments, the net effect was about $800 million in new debt, plus $361 million from employee stock options.

Why TSLA borrowed ?

• Even though TSLA has $44.7 billion in the bank, they are borrowing billions more.

• The new debt keeps cash levels steady even after the SpaceX purchase.

This shows that TSLA "strong" cash position is supported by loans / debts, not just from EV sales.

(6) EPS Examination.

Despite all the margin-flattering one-time accounting benefits, TSLA’s GAAP EPS was $0.13 (Q1 2026), negligibly above Q1 2025’s $0.12.

Its net income GAAP was $477 million (Q1 2026) vs $409 million (Q1 2025); that’s a +17% YoY growth on bottom line GAAP; not exactly the turnaround story its +136% operating income growth suggests.

Between TSLA’s Q1 2026’s (i) GAAP EPS of $0.13 and (ii) non-GAAP EPS of $0.41, the $0.28 gap is huge, driven largely by $1.030 billion in stock-based compensation, that included costs from the 2025 CEO award.

On the other hand, TSLA’s non-GAAP EPS that excludes this cost entirely, presents a dramatically rosier picture than GAAP reality.

(7) Regulatory Credit Sales.

TSLA's regulatory credit sales are high-margin revenue stream where TSLA sells excess zero-emission vehicle (ZEV) and environmental credits to other automakers who fail to meet legal pollution standards.

These credits, earned by producing only EVs, are pure profit that helps to bolster TSLA’s profitability.

In Q1 2025, regulatory credit sales of $595 million was the revenue stream that keeps TSLA’s profitable. Without it, TSLA would have lost money.

For Q1 2026, regulatory credits have decreased to $380 million (1.9% of auto revenue, down from Q1 2025’s 3.7%),

Falling revenue vs Falling deliveries

Vehicle deliveries:

TSLA reported 358,023 vehicles delivered vs analysts’ consensus of 366,000 expected; falling short by about 7,600 vehichles or -2.18%.

Compared to last quarter’s Q4 2025 deliveries of 418,227, it has fallen by -14.4%.

When matched against Q1 2025’s 336,681 vehicles: that’s a +6.34% YoY increase.

Despite achieving sequential growth, this marked the 2nd-worst quarterly sales performance since 2022.

Wedbush Securities, Fanboy analyst Dan Ives called it a "disappointing start" - from a cumulative delivery perspective.

Looking closer, one will also realize that TSLA has also built over 50,000 more vehicles than it sold, signaling notable inventory buildup.

This pushes its global vehicle inventory to 27 days of supply, up from 15 days (Q4 2025) that implies stocks are piling up, sales are not moving.

It remains a fact that by business segment, TSLA’s automotive business remained its primary revenue base, despite unsuccessful attempts by the CEO to pivot the company away from EVs.

Therefore, to record annual declines in the past 2 years, with a drop in the year-ago quarter partially attributable to “loss of several weeks of production” as the company was upgrading its Model Y factory lines, will be a drag on the company’s stock.

Post Earnings Reaction.

TSLA gave up after-hours gains, falling more than -2%, as investors listened to the CEO’s answer questions. Year-to-date, TSLA has fallen by about -11.54% (as of 22 Apr 2026 closing)

Most likely that earnings failed to significantly buoy TSLA’s stock, that has limped along so far in 2026 while its CEO, tried to sell the company’s new vision of (a) humanoid robots and (b) self-driving robotaxis.

We already know where TSLA’s robotaxis stand when matched against $Alphabet(GOOG)$’s Waymo autonomous vehicles. Click here ! to refresh your memory again.

Three things could be weighing on investor sentiment:

(1) Capital Expenditure.

• Tesla increased Capex to $25 billion for 2026, up from prior guidance of $20 billion, may not sit well with investors.

Robotaxi Rollout.

• During the post earnings conference, the CEO (now), does not expect significant robo-taxi revenues until 2027.

• TSLA's robo-taxi operations need to yield billions in profits to justify TSLA's $1.7 trillion valuation, based on its fully diluted share count, that includes Musk's options.

• As for TSLA’s full self-driving (FSD), the company claims 1.28 million subscribers.

• However, analysts note this total includes everyone who ever bought the package, not just current monthly subscribers.

• This dirties the data because Tesla had pushed owners to buy the software in Q4 2025, by going subscription-only.

Stock Price Movement.

Trading post earnings on Thu, 23 Apr 2026 saw TSLA slipping by -3.81% intraday. (see below)

23 Apr 2026 - mid day snapshot

• TSLA’s behaviour on 23 Apr 2026 is a classic "sell the news" reaction.

• Despite the headline earnings beat reported the previous evening, it opened significantly lower and continued to slide toward the midday mark.

• By 11:00 am, the price hit a morning low near $368, a sharp decline from the previous day's close.

• Between 12:00 pm and 1:00 pm, there was a minor recovery back toward $380, but the momentum failed to hold.

• TSLA began to trend downward after 1:00 pm, settling around $372.73 by mid-afternoon.

• By the time 4pm came around, it closed the day down by -3.56% at $373.72 /share. In after hours trading, TSLA dipped a further -0.14%.

My viewpoints : (mine only)

For the record, all the creative accounting undertaken is not illegal but standard corporate finance, to paint the books healthy.

However, the cumulative effect is a set of financials designed to tell a story that the underlying operations do not support.

TSLA is a $1.2 trillion company trading at over 150x GAAP earnings.

Investors are paying a premium and they deserve to know how much of the margin improvement they are celebrating is durable and how much disappears by Q2 2026.

As for the CEO’s vision and pivot to autonomous driving and humanoid robotics, he is a compelling story teller but lacks the finesse when it comes to delivery. (see below)

As such, the Q1 2026 results should be taken with a very large grain of salt. Agree ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• Do you think investors and Wall Street have finally caught up with the stories spun by TSLA ?

• Do you think TSLA has handed in a stellar set of earnings ? I don’t think so, after reading up and writing this post.

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