Tesla Margin Recovery Continues Despite Broader EV Pricing Pressure
First-quarter automotive gross margin expands to 21 percent, the strongest reading in two years.
Tesla reported first-quarter automotive gross margin of 21.3 percent, comfortably ahead of consensus expectations and the strongest reading since the second quarter of 2023.
The improvement reflects a combination of cost reductions on the Model Y refresh, more favourable battery cell pricing from CATL and LG Energy Solution, and the absence of the discounting cycle that compressed margins through 2024.
Energy storage continued its now-familiar role as the segment of strongest growth. Megapack deployments crossed 12.4 GWh in the quarter, with backlog visibility extending into late 2027.
Robotaxi commercial operations remain the strategic focus. Austin and Phoenix continue to expand on a measured cadence, with regulatory engagement in California and Texas progressing toward broader operational footprint by year-end.
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