MW Tesla's upcoming delivery report is a lot more important than it may seem

By William Gavin

Investors have lost some of their fascination with Tesla's car business, but selling lots of EVs is critical to funding Elon Musk's more futuristic ambitions

Tesla's electric-vehicle business still accounts for the vast majority of its revenue.

Tesla's delivery report used to be viewed as key barometer of the company's health, and its stock's momentum.

Now, ahead of next week's first-quarter update, UBS analyst Joseph Spak is asking: "Do deliveries even matter?"

The answer to that question is complicated. Are delivery numbers key to Tesla's $(TSLA)$ stock performance? "Probably not," or at least not like before, according to Spak.

But as investors have grown ever more preoccupied with futuristic ventures like robotaxis and humanoid robots, there's a fundamental disconnect between what's supporting Tesla's valuation and what's actually paying the bills.

Since Tesla isn't making any money off its robotaxi or humanoid-robot plans, and likely won't for a while, cars are still the moneymaker. For that reason, the delivery report is key to helping CEO Elon Musk achieve his lofty and expensive goals.

"While we expect sentiment will continue to overwhelmingly drive the stock (certainly more than auto deliveries), it is (primarily) the auto business that helps fund Tesla's cash flow and hence their investment for growth," Spak wrote. He rates Tesla at sell with a $352 per share price target.

Tesla is expected to report deliveries of 365,645 vehicles for the first quarter of 2026, according to a company-compiled consensus of sell-side analyst estimates. That implies growth of more than 8% compared to a year earlier. However, Tesla's performance in the first quarter of 2025 was also its worst, in terms of car sales, since the second quarter of 2022.

The report will be one of the last to include sales of the Model X and Model S vehicles. RBC analyst Tom Narayan said in a recent note to clients that the discontinuation of those models after June reflects Musk's "strategic pivot" toward futuristic undertakings, though the shift could pressure Tesla's vehicle business.

Don't miss: Tesla's self-driving effort could be worth more than double its EV division

Tesla has said it plans for at least $20 billion in capital expenditures this year. That excludes costs associated with the "Terafab," a planned semiconductor-manufacturing project Tesla is developing alongside SpaceX, another of Musk's companies. Analysts say that venture could easily cost trillions of dollars over time. It's unclear how costs associated with the Terafab will be divided up among Tesla and SpaceX.

See: Tesla finally catches a break in Europe

Tesla's automotive business brought in $69.5 billion in revenue last year, more than double what the rest of the company generated, even as sales from cars fell 10%. The company's energy and service-oriented business segments both logged growth in 2025, and each generated more than $12 billion in revenue.

Tesla next week is also expected to report energy-storage deployments of 14.4 gigawatt hours for the March quarter, according to analysts. That would be a new quarterly record.

At the end of 2025, Tesla said it had a little more than $44 billion in cash, cash equivalents and investments on hand. Tesla's free cash flow could turn negative this year for the first time since 2018, analysts have noted.

Tesla shares were down more than 2% in afternoon action on Friday, adding to their recent declines. The stock is off 23% over the last three months.

Investors are looking ahead to SpaceX's potentially record-breaking initial public offering, which could happen by the end of the second quarter. SpaceX is reportedly considering giving Tesla shareholders preferential treatment in the IPO and setting aside 30% of the offered shares to retail investors.

Read: 'Do you believe in Elon?': Musk tests Tesla investors' faith with an expensive chip-making plan

Some on Wall Street have speculated about a future merger, since the companies are collaborating on chip making. Tesla is also invested in SpaceX. Wedbush analyst Dan Ives said in a Friday note to clients that he expects the companies to combine in 2027, and thinks that such a development would give Musk greater control over the "AI ecosystem."

Other analysts are more skeptical. Gary Black, managing partner at the Future Fund, warned on Friday that if Tesla were to acquire SpaceX, the move could slash Tesla's value by up to 25%. A scenario where SpaceX purchased Tesla would likely "infuriate" IPO buyers, he added.

-William Gavin

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March 27, 2026 13:00 ET (17:00 GMT)

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