Tesla, Inc. (טסלה)

Analytical review · quarterly report for the quarter ended 30.6.2026 (Q2 2026)

Bakshi Finance — Family Office | Research Depth: Comprehensive

TSLA
NASDAQ · EVs, energy storage and AI
Revenue — April–June 2026 quarter
$28.2B
+26% year over year · trailing 12 months: $103.6B
Operating income in the quarter
$398M
1.4% margin · prior-year quarter: $923M (4.1%)
Net income in the quarter (reported)
$1,114M
Includes a SpaceX revaluation gain and a tax allowance release — see section 2
Free cash flow in the quarter
−$1.09B
Capital expenditures $5.79B · trailing 12 months: +$5.76B
Net cash — 30.6.2026
$34.4B
Cash and investments $43.5B vs. debt $9.1B
Market cap — 5.10.2026
$1.34–1.50T
Price $378.73 · approx. ₪4.1–4.6 trillion · depends on share basis (section 3)

What this review is based on. Tesla's Form 10-Q for the quarter ended 30 June 2026, filed 23 July 2026; the Q1 2026 Form 10-Q; the Form 10-K for 2025; the company's quarterly updates (8-K) from January to July 2026; the Q3 2026 production and deliveries release of 2 October 2026; and the 8-K on credit facilities of 29 September 2026. Market data: closing price on 5.10.2026 and the Bank of Israel representative USD rate on the same day (3.059). Q3 financial results are scheduled by the company for 21.10.2026 and are not included.

1

Company Profile

Tesla, Inc. designs, manufactures and sells electric vehicles — mainly the Model 3 and Model Y, alongside the Cybertruck — and energy storage systems for the grid (Megapack) and homes (Powerwall). Around the vehicle fleet sits a services layer: used vehicle sales, service and repair, Supercharger charging, insurance, and subscriptions to FSD (Supervised) driving software. Headquarters are in Austin, Texas, with factories in California, Texas, Nevada, Shanghai and Berlin.

Revenue for the 12 months to June 2026 was $103.6 billion — above $100 billion for the first time. Vehicle sales were about 71% of quarterly revenue, services about 16% and energy about 11%. Management describes the company's aim as "bringing artificial intelligence into the real world": an autonomous ride service (Robotaxi), a purpose-built vehicle for it (Cybercab), whose production began in Q2, and a humanoid robot (Optimus), whose first production lines are being installed at the Fremont factory.

The CEO, Elon Musk, is also CEO of SpaceX. In 2026 the CEO exercised about 304 million options under the 2018 award after the Delaware Supreme Court reinstated it. He also holds 423.7 million restricted shares under the 2025 award, conditioned on market-capitalization and operational milestones. Tesla reincorporated in Texas in June 2024.

2

Financial Performance

The quarter: revenue up, operating income down

In April–June 2026 revenue rose 26% to $28.2 billion. Vehicle sales rose 27%, mainly on roughly 25% more deliveries against a weak prior-year quarter (the Q2 2025 lines were changed over to the new Model Y). Services rose 50% and energy 13%. Regulatory credit revenue — emission credits Tesla sells to other manufacturers at almost no cost — fell 67% to $146 million, which the filing attributes to restrictions on credit programs.

Gross profit rose 23%, but operating expenses rose 47%: R&D +49% (mainly AI, per the filing) and SG&A +45% (including $283 million more stock-based compensation, mainly for the 2025 CEO award). Operating income fell 57% to $398 million — a 1.4% margin. Interest income on cash ($422 million) exceeded operating income in the quarter.

What needs to be normalized: net income of $1,114 million includes three non-operating items. (1) A $1,005 million pre-tax revaluation gain ($763 million after tax) on Tesla's SpaceX shares. (2) A $274 million release of a California tax valuation allowance. (3) A $112 million pre-tax bitcoin revaluation loss ($87 million after tax). Excluding all three, net income for the quarter is about $164 million. The quarter also includes a foreign-exchange loss of about $312 million on intercompany balances; such a loss recurred in each of the last four quarters, and if it is excluded as well, normalized net income rises to about $400 million. About 78% of normalized pre-tax income is net interest income.

$ millionsQ2-25Q3-25Q4-25Q1-26Q2-26
Revenue22,49628,09524,90122,38728,236
  of which regulatory credits439417542380146
Gross margin17.2%18.0%20.1%21.1%16.8%
Research and development1,5891,6301,7831,9462,371
Operating income9231,6241,409941398
Net income to common (reported)1,1721,3738404771,114
Net income excl. revaluations and one-off tax9501,3111,079650164
Diluted EPS ($)0.330.390.240.130.32
Stock-based compensation6356639541,0301,151

"Net income excl. revaluations and one-off tax" = reported, less SpaceX and bitcoin revaluation gains (or plus their losses) and the tax allowance release, per the company's reconciliation table. Foreign exchange is not excluded.

The multi-year context

In 2023–2025 revenue was nearly flat ($96.8, $97.7 and $94.8 billion) while operating income fell from $8.9 to $4.4 billion. Operating margin fell from 9.2% to 4.6%, and was 4.2% over the last four quarters. Two opposing trends sit inside these numbers: gross profit excluding regulatory credits rose 34% in Q2 year over year, and automotive margin excluding credits rose from 15.0% to 16.3%; at the same time R&D, stock-based compensation and legal costs grew faster.

$ billions20232024202512 months to 6.2026
Revenue96.897.794.8103.6
Operating income8.97.14.44.4
Net income to common15.0*7.13.83.8
Research and development4.04.56.47.7
Free cash flow4.43.66.25.8

* Includes a one-time tax benefit of about $5.0 billion from releasing a deferred tax asset valuation allowance.

Revenue by source and quarter
$ millions · source: quarterly updates (8-K) and 10-Q filings
Margins: gross, operating, and automotive excl. credits
Percent · source: quarterly updates, company reconciliation
Revenue and operating income by year
$ billions · last column: 12 months to June 2026 · source: 10-K, 10-Q
Reported net income vs. excl. revaluations and one-off tax
$ millions · source: reconciliation tables in quarterly updates
3

Balance Sheet & Capital

On 30.6.2026 Tesla held $43.5 billion in cash and short-term investments. Debt was $9.1 billion (principal), almost all non-recourse to the parent: a China working-capital facility ($5.9 billion) and notes backed by leases and financing receivables. Recourse debt was only $2 million. Net cash: $34.4 billion. Shareholders' equity: $86.9 billion.

Investment cycle: Q2 capital expenditures reached $5.79 billion, 2.3 times Q1, and free cash flow was negative (−$1.09 billion) for the first time since Q1 2024. According to management, 2026 capital expenditures will exceed $25 billion — mainly AI compute and data centers, production lines, a company-owned vehicle fleet, and service and charging infrastructure. $8.28 billion was spent in the first half. The "AI infrastructure" line in property, plant and equipment rose from $6.8 to $10.8 billion in six months. Per the filing, periods of high capital spending will require funding beyond operating cash flow.

New credit facilities: on 29.9.2026 Tesla signed $30 billion of unsecured facilities: a three-year delayed-draw term loan ($20 billion, stepping down to $10 billion after one year), a five-year revolver ($8 billion) and a 364-day facility ($2 billion). The previous $5 billion revolver was terminated. The company states it does not currently plan to draw on the facilities in 2026.

Non-operating assets: SpaceX shares worth $3.0 billion (a $2.0 billion investment in March 2026, originally in xAI shares; under 1% of the company; sale restriction until December 2026), and about 11,500 bitcoin worth $0.67 billion.

Share basis: 3,949 million shares issued, including 423.7 million unearned performance shares of the 2025 CEO award. Weighted diluted shares in the quarter: 3,540 million. Market cap on 5.10.2026 is therefore $1.50 trillion on issued shares, or $1.34 trillion excluding the performance shares. Tesla has no buyback and pays no dividend.

4

Segments

Tesla reports two segments — automotive (including services) and energy — measured at gross profit only. The filings show no segment operating income and no separate disclosure of revenue from autonomous driving, Robotaxi or Optimus.

Q2, $ millionsRevenue 2025Revenue 2026ChangeGross margin 2025Gross margin 2026
Automotive and services19,70725,097+27%15.4%16.4%
  of which services and other3,0464,581+50%5.4%14.1%
Energy2,7893,139+13%30.3%20.4%

Automotive: automotive margin excluding regulatory credits was 16.3%, vs. 15.0% a year earlier and 19.2% in Q1. Per the company, average selling price (ex-currency) declined and cost per vehicle fell on lower import duties. Active FSD subscriptions: 1.48 million, up 56% in a year. Revenue outside the US and China rose 62%.

Energy: gross margin fell to 20.4%, from 30.3% a year earlier and 39.5% in Q1. The company attributes the decline to a lower average Megapack price, mix, and warranty charges related to a supplier's battery-cell issue. The filing does not quantify the charge. Energy inventory rose from $2.7 to $4.1 billion in six months. Contracted backlog not yet performed (contracts over one year): $10.05 billion. $318 million of energy revenue in the quarter came from sales to SpaceX, a related party; excluding it, energy revenue grew about 1%.

Operating dataQ2-25Q3-25Q4-25Q1-26Q2-26Q3-26
Vehicle deliveries384,122497,099418,227358,023480,126486,532
Vehicle production410,244447,450434,358408,386451,758464,391
Storage deployed (GWh)9.612.514.28.813.513.7
Active FSD subscriptions (millions)0.951.041.101.281.48—

Q3 2026: production and deliveries only, from the company's release of 2.10.2026. Deliveries fell 2.1% vs. Q3 2025 and storage deployments rose 9.6%.

Operating cash flow, capital expenditures and free cash flow
$ millions · quarterly · source: quarterly updates
Energy: storage deployed and gross margin
GWh and percent · Q3-26: deployments only · source: delivery releases, 10-Q
5

Competitive Position

The differentiation the company presents is vertical integration: designing and building about 1.6 million vehicles a year, producing batteries and their inputs (4680 cells, cathode and lithium refining in Texas), a charging network of about 82,000 connectors at 8,704 stations whose plug standard has been adopted by other manufacturers, a fleet of about 9.7 million vehicles that collects driving data, and in-house AI training compute (Cortex). Management describes the current production constraint as battery-pack capacity.

Where the filings show pressure: automotive revenue declined in 2024 and 2025, and the company cites a lower average selling price. Automotive margins excluding credits of 15%–19% are manufacturing margins, not software margins. Regulatory credit revenue, until recently a significant part of operating income, is shrinking per the filing because of regulatory changes. In energy, the company states that tariffs and US legislative changes weigh more heavily than in automotive.

Autonomous driving: per the company, the Robotaxi service operates in seven US metro areas, in six of them ramping without a safety driver, and FSD (with driver supervision) has been approved in five European countries. The filings do not disclose revenue, costs or fleet size for the service. This review does not include competitor data from primary sources.

6

How to Think About This Company

With Tesla, the central question is what part of the value belongs to the business shown in the filings, and what part to businesses not yet shown in them. The reported business is a vehicle and storage manufacturer with about $104 billion of revenue and about $4.4 billion of operating income over 12 months. The businesses management presents as the center of its strategy — autonomous rides, robotics and software — do not yet appear as separate revenue lines. Reading Tesla means holding the two pictures separately rather than blending them.

Normalize before comparing. In Q2, about 85% of reported net income came from the SpaceX revaluation and the tax allowance release. Per the filing's notes, the marketability restriction on the SpaceX shares, for which $238 million was deducted from their value, ends in September 2026 — so Q3 results may also contain a revaluation component. Foreign exchange on intercompany balances can move earnings by hundreds of millions per quarter; per the filing, a 10% currency move equals about $1.64 billion before tax.

The decline in operating income has three parts. Gross profit excluding credits rose. What reduced operating income was (1) the gradual disappearance of regulatory credits, (2) stock-based compensation, especially the 2025 CEO award, and (3) cash R&D spending on AI, which rose by about $600 million in the quarter. The third part is a management investment decision. It is expensed rather than capitalized, so it flows straight through earnings.

The cash earns, and capital spending draws it down. In Q2 interest income ($422 million) exceeded operating income ($398 million). According to management, 2026 capital expenditures will exceed $25 billion, almost three times 2025. If that pace materializes, the cash pile shrinks, and the interest income it generates shrinks with it. The company signed $30 billion of credit facilities and stated it does not plan to draw on them in 2026.

Energy: growth, margins, and a related party. The storage business grew from $6.0 billion in 2023 to $12.8 billion in 2025, with gross margins near 30%. In Q2 the margin fell to 20.4% because of a supplier cell issue that was not quantified. The largest customer identified in the quarter is SpaceX — a company whose CEO is also Tesla's CEO.

Software on an existing fleet. 1.48 million active FSD subscriptions, and per the company more than 55% of North American deliveries include a subscription. Deferred revenue for FSD, connectivity and charging stood at $4.05 billion. This is the only software metric the filings disclose regularly.

Governance and compensation. The 2025 CEO award has 12 share tranches, each conditioned on a market-cap milestone (from $2 to $8.5 trillion) and an operational milestone. Per the filing, unrecognized expense for milestones not currently considered probable is $105.8–120.4 billion, to be recognized if they are deemed probable. The award's compensation expense is not tax-deductible. Alongside this, Tesla holds SpaceX shares and sells products to SpaceX.

Market value vs. reported earnings. On 5.10.2026 the price-to-earnings ratio was about 351, based on trailing 12-month diluted EPS ($1.08). Free cash flow yield on market cap was about 0.4%. These figures describe the starting point only: the gap between market value and the earnings of the reported business is, in effect, the value the market attributes to businesses not yet in the filings.

What will test the picture. Separate disclosure of revenue and costs for autonomous rides; automotive margin excluding credits; recovery of energy margins; the split of capital spending between AI and manufacturing; and whether the new facilities are drawn. None of these is decisive on its own.

This framework is intended to structure analysis, not to produce an investment conclusion. The site does not participate in the decision — the decision is the reader's.

7

Risks & Monitoring

Risks that emerge from the filings

  • Key-person dependence: the CEO also runs SpaceX. The 2018 and 2025 awards depend on his continued service (the 2018 award shares vest only in January 2028).
  • Related parties: a $2 billion investment in SpaceX shares, and Megapack sales to SpaceX of $405 million in the first half.
  • Regulatory credits: per the filing, credit programs have been restricted; revenue from them fell 67% in the quarter.
  • Capital spending and funding: more than $25 billion in 2026 per management; negative free cash flow in Q2.
  • Legal proceedings: in Benavides (Autopilot), the jury awarded $129 million in compensatory damages (33% attributed to the company) and $200 million in punitive damages; on appeal. Class actions on driving capabilities, including a securities action; a California civil-rights trial that began in September 2026.
  • Tariffs and policy: per the company, the tariff regime weighs more on energy; US EV incentives have been eliminated.
  • Currency: the company does not hedge; a 10% move equals about $1.64 billion before tax.
  • Residual value guarantees: maximum exposure of $4.07 billion to financing banks.

Items to monitor in the Q3 report (21.10.2026)

#ItemLatest reading
1Operating income and margin, separately from regulatory credits$398 million, 1.4%
2Earnings excl. SpaceX and bitcoin revaluation, FX and one-off taxAbout $164 million (about $400 million excl. FX)
3Capital expenditures and free cash flow$5.79 billion; −$1.09 billion
4Energy margin and the cell issue20.4%
5Automotive margin excl. credits16.3%
6FSD subscriptions and Robotaxi disclosure1.48 million; no financial disclosure
7Related-party sales$318 million in the quarter
8Draws on the new credit facilitiesNone; per the company, not planned for 2026
8

Scenario Framework

The scenarios below are descriptive, not predictive. They contain no prices, no probabilities and no ranking of outcomes. Their sole purpose is to organize the conditions that would need to hold for each state to materialize, so they can be checked against future filings.

Scenarios are descriptive, not predictive.

Conditions for a positive convergence
If the following hold together
  • If the company begins disclosing revenue and costs of autonomous rides, and they show positive unit economics
  • If automotive margin excluding credits stays above the prior-year level even as credits keep falling
  • If energy margins return to around 30% once the cell issue is resolved
  • If operating cash flow funds the investment cycle without drawing on the facilities
Conditions for the status quo
If the picture stays as it is
  • If deliveries stay around 1.6–1.8 million vehicles a year
  • If operating income stays low because of AI and compensation expense, while gross profit excluding credits keeps rising
  • If autonomous rides expand geographically without separate financial disclosure
  • If reported earnings keep moving mainly on revaluations and currency
Conditions for a negative convergence
If the following hold
  • If capital spending keeps rising and the company needs to draw on the facilities
  • If average selling price per vehicle keeps falling faster than cost
  • If the energy cell issue proves persistent
  • If a legal or regulatory proceeding restricts autonomous driving services or their marketing
9

Analytical Lens

The six questions below are identical in every company review we publish. They are deliberately open and do not lead to a single conclusion. Their role is to let the reader examine the company along the same six dimensions as every other company.

📈
Growth
Which pace represents the company: nearly flat revenue in 2023–2025, or 26% growth in Q2 2026 against a weak prior-year quarter? And what does the 2.1% decline in Q3 deliveries say?
💰
Profitability
How much profit remains after excluding revaluations, currency and one-off tax? And what part of the decline in operating income is an investment decision, and what part is price pressure?
⚖️
Leverage
How should one read a company with $34.4 billion of net cash that plans more than $25 billion of annual capital spending and has signed $30 billion of facilities?
🛡️
Competitive Position
How hard to replicate is the combination of manufacturing, batteries, charging and fleet data, when automotive margins excluding credits move between 15% and 19%?
👥
Management Quality
How should engineering and manufacturing execution be weighed against a CEO who runs two companies, transactions with SpaceX, and a compensation award of unprecedented size?
🧩
Business Complexity & Risk
How much of the value depends on businesses that do not yet have a revenue line in the filings, and which disclosures would allow them to be examined?
10

Key Observations

1. In April–June 2026 Tesla reported revenue of $28.2 billion (+26%) and operating income of $398 million (−57%), a 1.4% margin. Net income of $1,114 million included a $763 million after-tax SpaceX revaluation gain and a $274 million tax allowance release.

2. Gross profit excluding regulatory credits rose 34% year over year. R&D rose 49% and SG&A 45%. Regulatory credit revenue fell 67%.

3. Capital expenditures in the quarter were $5.79 billion and free cash flow −$1.09 billion. According to management, 2026 capital expenditures will exceed $25 billion. On 29.9.2026 $30 billion of credit facilities were signed.

4. In Q3 2026 Tesla delivered 486,532 vehicles (−2.1% vs. Q3 2025) and deployed 13.7 GWh of storage (+9.6%). Per the company, Q3 financial results will be published on 21.10.2026.

Operating format and regulatory disclosure

Bakshi Finance operates as a Family Office for qualified clients only. Mr. Yaron Bakshi held a licensed investment advisor license in 2008–2023. As of the date of this document, the company does not hold an investment advisory, investment marketing or portfolio management license.

This document is intended for research and professional study only. Nothing herein constitutes a recommendation to buy, sell, hold or take any action in securities. It is not a substitute for advice that takes into account each person's data and needs. Any decision is the investor's sole responsibility.

Past performance does not indicate future results. Data was drawn from official sources: the Form 10-Q for the quarter ended 30.6.2026 (23.7.2026), the Q1 2026 Form 10-Q, the Form 10-K for 2025 (29.1.2026), and the company's quarterly updates, production and delivery releases and 8-K filings with the US Securities and Exchange Commission. Market price: stockanalysis.com. Filings published after this date are not included.

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Qualified-Client Review — Family Office

The full analytical review of Tesla (TSLA) for the quarter ended June 2026 is available to Bakshi Finance premium clients.
It includes a 10-section analysis, "How to Think About This Company" paragraphs, a structured scenario framework, and a 6-dimension Analytical Lens.

Unlock this review Educational content only · Not investment advice · See disclosure