Tesla surprises Wall Street and says demand for vehicles has returned

Tesla defied expectations, profiting more and spending less than expected in closely watched results as the company shifts focus from electric vehicles to artificial intelligence (AI).

The company, co-founded and headed by the world's richest man, Elon Musk, also announced a "rebound of demand" in Europe, the Middle East and Africa and North America.

Money blog: Holidays 'very likely' at risk as EU warns of 'crisis'

Mr Musk's involvement in the Trump administration's Department of Government Efficiency (DOGE) led to a backlash against Tesla vehicles, involving protests at dealerships and vandalism of some Teslas.

Some public perception of the brand may have changed following Mr Musk's April 2025 return to full-time work as Tesla chief executive: the company added there was "continued growth in demand" in the Asia-Pacific region and South. America.

Self-driving cars and robot production

Perhaps more of interest to observers is less the business's finances and more what it has to say on robots and self-driving taxis, the innovations that Tesla has staked its future on.

On that front, the updates were not as exciting as they could have been: there was no new announcement on cities for the rollout of the so-called Robotaxi self-driving car.

But paid Robotaxi miles nearly doubled, and Tesla said it "continued laying the groundwork for expansion... allowing us to quickly launch new markets once we are ready".

Robotaxis are available in the US cities of Austin, Texas and San Francisco and Tesla hopes to expand its services.

Tesla's first-quarter results on Wednesday said preparations for its first large-scale robot building factory in California will "begin shortly".

Preparations for long-term annual production capacity of 10 million robots are under way in Texas, the financial update added.

At the same time, profits are up in the important set of results as Tesla changes gear towards robotics and AI.

A measure of company profits - total gross profit - rose 50% from last year, reaching $4.7bn (£3.5bn).

Capital spending, too, was lower than Wall Street may have expected - coming in around $2.5bn (£1.8bn) despite Tesla saying in January it was to commit $20bn this year to ramp up investment in and production of cars, batteries and robots.

From politics to robots

In recent months, Tesla lost its crown as the world's bestselling electric vehicle maker to Chinese manufacturer BYD, which sold 2.26 million vehicles last year, compared with Tesla's 1.64 million.

Tesla also announced the axing of two electric vehicle models, its older Model S and Model X.

Mr Musk's move from politics and resumption of full-time focus on Tesla was welcomed by Tesla's board of directors, who oversee the management of the business.

What about Musk's $1trn pay?

He is, however, far away from receiving the $1trn pay award, the largest corporate pay package in history, approved by the company's shareholders.

There is a series of onerous company performance steps the business must reach for Mr Musk to grow his ownership of the company and receive payment.

One is a requirement for Tesla to roll out one million AI-powered robots, even though it hasn't released a single one so far, and deliver 20 million Tesla vehicles over the next decade.

Mr Musk will also need to come up with a succession plan on who will replace him as the chief executive of Tesla.

(c) Sky News 2026: Tesla surprises Wall Street and says demand for vehicles has returned