Tesla is expected to make large-scale investments totaling $25 billion (about 37 trillion won) this year. The U.S. electric vehicle maker plans to nearly triple its spending from last year to accelerate its transformation into an artificial intelligence (AI) and robotics-focused company, though concerns are emerging over worsening financial health and cash flow pressures.
Tesla reported first-quarter operating profit of $941 million (about 1.3 trillion won), up 136% from a year earlier, according to Reuters and other outlets on Tuesday local time. The sharp increase in profit is attributed to one-time factors such as tariffs and exchange rates. Revenue rose 16% year-on-year to $22.387 billion, while earnings per share (EPS) came in at $0.41. The company also generated $1.44 billion in free cash flow through cost-cutting measures.
The results are viewed as meeting market expectations. According to Bloomberg, the market had initially forecast revenue of $22.2 billion and EPS of $0.34. Vehicle deliveries reached 358,023 units, up about 6% from a year earlier, reflecting an overall recovery trend.
Market attention focused on Tesla's investment plans. The company announced it would expand capital expenditures (CAPEX) to $25 billion this year. This marks a 25% upward revision from the investment outlook announced in January, which had projected spending above $20 billion. Compared with last year's $8.5 billion, the figure represents a nearly threefold surge.
The company plans to use the large-scale investment to strengthen its battery and energy supply chains and invest in a new semiconductor research plant in Austin, Texas.
Tesla on Tuesday proposed investing about $3 billion to build a research semiconductor fab at its Texas plant site. The company also said it would use Intel's next-generation 14A process for its "Terafab" project, which will mass-produce AI chips. Tesla will begin production of its humanoid robot Optimus in the second quarter, while also mass-producing the Semi electric pickup truck within the year. Mass production of the Cybercab, a fully autonomous vehicle without a steering wheel or pedals, will also begin this year. Tech publication TechCrunch said, "Tesla's expanded investment is directly tied to Elon Musk's strategy of evolving beyond an electric vehicle company into an AI robotics company."
However, there is considerable caution over the aggressive investment expansion. Critics point out that massive capital expenditures could pressure short-term cash flow and weigh on the financial structure. Vaibhav Taneja, Tesla's chief financial officer (CFO), said, "Free cash flow this year will turn negative."
The stock price reflected these concerns. Tesla shares rose nearly 5% in after-hours trading immediately after the earnings announcement, but gave back all gains and returned to flat territory once the investment plans were disclosed.
