Investor's Corner
Tesla’s China factory can’t arrive soon enough amid escalating US-China trade war
Amidst the escalating trade war between the United States and China, American automakers such as Tesla have become the first victims of renewed, hefty tariffs on US-made products entering the country. In response to the 25% duties imposed by the United States government on $34 billion worth of Chinese imports last week, China has decided to strike back by placing a 40% levy on vehicles made in America.
The latest tariffs have forced Tesla to raise the prices of its Model S luxury sedan and its Model X SUV by 150,000 yuan ($22,647) to 250,000 yuan ($37,744). With the new duties in place, a fully-loaded Tesla Model S P100D now costs 1.47 million yuan ($221,937) in China, a far cry from the $147,000 price of the vehicle in the United States.
The latest tariffs come at a time when China implemented a reduction of its import duties for foreign-made vehicles from 20-25% to 15%. On the heels of the Chinese government’s announcement earlier this year, the response from Tesla’s customer base in the country was immediate. In Tesla’s Shanghai gallery alone, prospective buyers cleared out the store’s entire Model X 75D inventory in 24 hours after it was announced that the price of the vehicle would be reduced by $11,000 after the 15% tariffs were implemented.
While it is unfortunate to see the ongoing trade dispute between the United States and China once more affecting the prices of Tesla’s vehicles in the country, it is pertinent to note that even with hefty taxes placed on its electric cars, Tesla was fighting the good fight in China, and it was still thriving. The company, after all, established its presence and its reputation under an environment where its cars were priced far beyond its local competition.
Tesla’s story in China is one that showcases the learning curve that the California-based electric car and energy company continues to go through. Tesla began taking pre-orders for the Model S in China in August 2013. At that point in Tesla’s history, CEO Elon Musk was not even sure how much the production vehicle would cost. Deliveries were also expected to be eight months away. Anticipation among Chinese buyers, however, were high nonetheless, thanks to a combination of factors including Elon Musk’s rockstar status, as well as talks about the vehicle’s performance and supercar-worthy acceleration. Pre-orders for the Model S topped 5,000 that year.
Unfortunately, Tesla was not able to support these first Model S owners properly. Due to miscalculations on its business strategy, Tesla ended up with a lot of disgruntled Chinese owners. One Model S buyer even made national news after he smashed the windshield of his own Tesla after the car arrived months later than expected. To top it off, the Supercharger network, widely considered as Tesla’s ace in the electric car industry today, was still in its infancy then, and China only had a small system centered around key cities. Things changed, however, on January 2015, when Elon Musk flew to China and met with President Xi Jinping. Musk also admitted to Tesla’s “earlier mistakes,” stating that he was nonetheless “very optimistic” about the company’s chances in the country. Tesla also attended the Shanghai Auto Show, sparking more interest in its electric vehicles.
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- Tesla’s grand opening of its Changsha, China store. [Credit: @vincent13031925/Twitter]
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- Credit: Dennis Chang via Twitter
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- Tesla’s grand opening of its Changsha, China store. [Credit: @vincent13031925/Twitter]
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- Tesla’s grand opening of its Shenzhen, China store. [Credit: @vincent13031925/Twitter]
In the months that followed, Tesla expanded its Supercharger network, curbing the “range anxiety” of China’s electric car owners. Word-of-mouth about the company’s non-dealership sales model also started spreading. Tesla’s business in China experienced a massive boost when it introduced the Model X as well, considering the country’s obsession with SUVs. Government regulations, such as Shanghai’s electric-car friendly license plates gave even more benefits to Tesla. By the end of 2017, Tesla had already opened the largest Supercharger in the world in Shanghai. The company’s sales in the country in 2016 also helped boost its revenue enough to join the Fortune 500 list for the first time.
With Tesla’s history in mind, the renewed tariffs from the United States and China’s ongoing trade dispute could actually have little effect on Tesla’s overall operations in the country. The new duties will result in lost sales — that much is a given — but Tesla’s pedigree as a luxury automaker that makes cars that are the ultimate status symbols in China remain undaunted.
Tesla’s approval for its China site from the Central Committee of the Communist Party of China. [Credit: vincent13031925/Twitter]
Tesla, after all, has not really started its mass market push in China. The Model 3 and the Model Y, the company’s two vehicles that are targeted to dominate in the midrange segment, have not arrived in the country as of yet. With Elon Musk confirming during the Q1 2018 earnings call that the next Gigafactory will be in China, and that the facility will incorporate vehicle production, the solely-owned factory should allow Tesla to avoid the import taxes imposed on its upcoming, more budget-friendly vehicles — trade war or no trade war.
Tesla’s China Gigafactory is expected to be the site where the electric car maker will manufacture the Model Y crossover SUV, as well as some of the Model 3. Both vehicles are targeted towards the mass-market, with Tesla estimating that the Model Y could see a demand of up to 1 million vehicles per year. With the Model Y and Model 3, Tesla could compete in China not only in the luxury segment, but on the more lucrative and more competitive midrange market as well. For now, however, Tesla’s efforts to establish its own factory in China seems to be going well, with the company being granted a final approval for its solely-owned electric car facility by the Central Committee of the Communist Party of China.
Elon Musk
Tesla confirmed HW3 can’t do Unsupervised FSD but there’s more to the story
Tesla confirmed HW3 vehicles cannot run unsupervised FSD, replacing its free upgrade promise with a discounted trade-in.
Tesla has officially confirmed that early vehicles with its Autopilot Hardware 3 (HW3) will not be capable of unsupervised Full Self-Driving, while extending a path forward for legacy owners through a discounted trade-in program. The announcement came by way of Elon Musk in today’s Tesla Q1 2026 earnings call.
🚨 Our LIVE updates on the Tesla Earnings Call will take place here in a thread 🧵
Follow along below: pic.twitter.com/hzJeBitzJU
— TESLARATI (@Teslarati) April 22, 2026
The history here matters. HW3 launched in April 2019, and Tesla sold Full Self-Driving packages to owners on the understanding that the hardware was sufficient for full autonomy. Some owners paid between $8,000 and $15,000 for FSD during that period. For years, as FSD’s AI models grew more demanding, HW3 vehicles fell progressively further behind, eventually landing on FSD v12.6 in January 2025 while AI4 vehicles moved to v13 and then v14. When Musk acknowledged in January 2025 that HW3 simply could not reach unsupervised operation, and alluded to a difficult hardware retrofit.
The near-term offering is more concrete. Tesla’s head of Autopilot Ashok Elluswamy confirmed on today’s call that a V14-lite will be coming to HW3 vehicles in late June, bringing all the V14 features currently running on AI4 hardware. That is a meaningful software update for owners who have been frozen at v12.6 for over a year, and it represents genuine effort to keep older hardware relevant. Unsupervised FSD for vehicles is now targeted for Q4 2026 at the earliest, with Musk describing it as a gradual, geography-limited rollout.
For HW3 owners, the over-the-air V14-lite update is welcomed, and the discounted trade-in path at least acknowledges an old obligation. What happens next with the trade-in pricing will define how this chapter ultimately gets written. If Tesla prices the hardware path fairly, acknowledges what early adopters are owed, and delivers V14-lite on the June timeline it committed to today, it has a real opportunity to convert one of the longest-running sore subjects among early adopters into a loyalty story.
Tesla (NASDAQ: TSLA) reported its earnings for the first quarter of 2026 on Wednesday afternoon. Here’s what the company reported compared to what Wall Street analysts expected.
The earnings results come after Tesla reported a miss on vehicle deliveries for the first quarter, delivering 358,023 vehicles and building 408,386 cars during the three-month span.
As Tesla transitions more toward AI and sees itself as less of a car company, expectations for deliveries will begin to become less of a central point in the consensus of how the quarter is perceived.
Nevertheless, Tesla is leaning on its strong foundation as a car company to carry forward its AI ambitions. The first quarter is a good ground layer for the rest of the year.
Tesla Q1 2026 Earnings Results
Tesla’s Earnings Results are as follows:
- Non-GAAP EPS – $0.41 Reported vs. $0.36 Expected
- Revenues – $22.387 billion vs. $22.35 billion Expected
- Free Cash Flow – $1.444 billion
- Profit – $4.72 billion
Tesla beat analyst expectations, so it will be interesting to see how the stock responds. IN the past, we’ve seen Tesla beat analyst expectations considerably, followed by a sharp drop in stock price.
On the same token, we’ve seen Tesla miss and the stock price go up the following trading session.
Tesla will hold its Q1 2026 Earnings Call in about 90 minutes at 5:30 p.m. on the East Coast. Remarks will be made by CEO Elon Musk and other executives, who will shed some light on the investor questions that we covered earlier this week.
You can stream it below. Additionally, we will be doing our Live Blog on X and Facebook.
Q1 2026 Earnings Call at 4:30pm CT https://t.co/pkYIaGJ32y
— Tesla (@Tesla) April 22, 2026
Elon Musk
Tesla Earnings: financial expectations and what we should to hear about
In terms of discussions, Tesla earnings calls are usually a great time to get some clarification on the company’s outlook for its current and future projects.
Tesla (NASDAQ: TSLA) will report its earnings for the first quarter of 2026 this evening after the market closes, and analysts have already put out their expectations from a financial standpoint for the company’s first three months of the year.
Additionally, there will be plenty of things that will be discussed, including the recent expansion of the Robotaxi program, the Roadster unveiling, and Full Self-Driving (Supervised) approvals across the globe.
Financial Expectations
Wall Street consensus expectations put Tesla’s Earnings Per Share (EPS) at $0.36, while revenues are expected to come in around $22.35 billion.
This would compare to an EPS of $0.27 and $19.34 billion compared to Tesla’s Q1 2025. Last quarter, EPS came in at $0.50 on $29.4 billion of revenue.
Tesla beat analyst expectations last quarter, but the next trading day, the stock fell nearly 3.5 percent. We never quite can gauge how the market will respond to Tesla’s earnings; we’ve seen shares rise on a miss and fall on a beat.
It really goes on the news, and investor consensus, it seems.
What to Expect
In terms of discussions, Tesla earnings calls are usually a great time to get some clarification on the company’s outlook for its current and future projects. Right now, the big focus of investors is the Robotaxi program, the Roadster unveiling, and what the outlook for Full Self-Driving’s expansion throughout Europe and the rest of the world looks like.
Robotaxi
Tesla just recently expanded its unsupervised Robotaxi program to Dallas and Houston, joining Austin as the first cities in the U.S. to have access to the company’s ride-hailing suite.
Tesla expands Unsupervised Robotaxi service to two new cities
Some saw this move as a quick effort to turn attention away from a delivery miss and an anticipated miss on earnings. However, we’ve seen Tesla be more than deliberate with its expansion of the Robotaxi suite, so it’s hard to believe the company would make this move if it were not truly ready to do so.
The company is also working to expand its U.S. ride-hailing service outside of Texas and California, and recently filed paperwork to build a Robotaxi-exclusive Supercharger stall.
Expansion is planned for Florida, Nevada, and Arizona at some point this year, with more states to follow.
Roadster Unveiling
The Roadster unveiling was slated for April 1, and then pushed back (once again) to “probably late April,” according to Elon Musk.
It does not appear that the Roadster unveiling will happen within that time frame, at least not to our knowledge. Nobody has received media or press invites for a Roadster unveiling, and given the lofty expectations set for the vehicle by Musk and Co., it seems like something they’d want to show off to the public.
The Roadster has become a truly frustrating project for Tesla and its fans; evidently, there is something that is not up to the expectations Musk and others have. Meanwhile, fans are essentially waiting for something that is six years late.
At this point, also given the company’s focus on autonomy, it almost seems more worth it to just cancel it, remove any and all timelines and expectations, and surprise people with something crazy down the line, maybe in two or three years. There should be no talk of it.
Full Self-Driving Global Expansion
We expect Musk and Co. to shed some details on where it stands with other European government bodies, as it recently was able to roll out FSD (Supervised) to customers in the Netherlands.
Spain is also working with Tesla to assess FSD’s viability as a publicly available option for owners.
With that being said, there should be some additional information for investors as they listen to the call; no talk of it would be a pretty big letdown.
Optimus
There will likely be a date set for the Gen 3 Optimus unveiling, and we’re hopeful Tesla can keep that date set in stone and meet it. Not reaching timelines is a relatively minor issue, but a company can only do this for so long before its fans and investors start to lose trust and disregard any talk about dates.
It seems this is happening already.
Optimus has been pegged as Tesla’s big money maker for the future. The goals and expectations are high, but it is a privilege to have that sort of pressure when investors know the company’s capability.
Tesla Cybercab gets crazy change as mass production begins
Tesla confirms Cybercab with no steering wheel enters production
