April 22 (Reuters) - Tesla reported a surprise positive free cash flow in the first quarter on Wednesday, defying expectations for cash burn as the electric-vehicle maker is yet to ramp up spending on artificial intelligence and manufacturing capacity.
Shares of the automaker were up 3.4% in extended trading.The company reported positive free cash flow of $1.44 billion in the first quarter, compared with estimates for a cash burn of $1.43 billion, according to data compiled by LSEG.
The Austin, Texas-based
automaker reported revenue of $22.39 billion for the three months ended March 31, compared with analysts' average estimate of $22.6 billion, according to data compiled by LSEG.
Tesla delivered fewer vehicles than Wall Street expected in the first quarter, but deliveries were up 6.3% from a year earlier, when protests against Musk's far-right politics had weighed on demand.
Tesla's core automotive business has come under pressure as competitors introduce newer models, often at lower price points. The expiration of a U.S. electric-vehicle tax incentive has added to the strain.
Tesla is developing an all-new smaller, cheaper electric SUV, with plans to start production in China and potentially expand production to the U.S. and Europe, Reuters reported exclusively. The project remains in the early stages of development and is not expected to reach production in the near term.Tesla had in 2024 canceled plans to build a cheaper EV platform and instead introduced lower-priced "Standard" versions of its best-selling Model 3 and Model Y to attract more price-sensitive buyers. However, analysts have cut their estimates for annual deliveries, with some expecting a drop this year.
Wall Street expects the company to deliver 1.67 million units in 2026, representing an 2.4% increase, according to Visible Alpha data.
Investors have increasingly turned their attention to Musk's push into self-driving technology and robotics, seeking clearer evidence that the autonomy narrative is shifting from promise to commercial reality.
Tesla's energy generation and storage unit has emerged as a key bright spot, buoyed by sustained demand for grid-scale batteries that support renewable energy and help stabilize electricity networks.
Tesla started rolling out its robotaxis in Dallas and Houston, it said on Saturday, marking further expansion of its nascent service in the United States since its Austin, Texas, launch last year.
Musk has repeatedly set ambitious rollout targets, later scaling them back to a handful of major cities. He has said Tesla aims to expand robotaxi services to around seven metropolitan areas in the first half of the year, though the company has previously missed similar timelines.
Dutch vehicle authority RDW has notified the European Commission of its plan to seek European Union-wide approval for the Full Self-Driving software system, the regulator said earlier this month. It has notified the European Commission of its intention to pursue EU-wide clearance.
Musk said earlier this year that Tesla aimed to start producing its purpose-built Cybercab in April, describing it as a fully autonomous vehicle without a steering wheel or pedals.
(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Pooja Desai)
