Research Briefing | CICC: Tesla's gross profit margin continues to improve, target price maintained at $500

Glonghui, April 27 – China International Capital Corporation released a research report stating that Tesla announced its Q1 2026 results, with operating income reaching $22.387 billion, a year-on-year increase of 16%; GAAP net profit attributable to shareholders was $477 million, up 17% year-on-year; Non-GAAP net profit was $1.453 billion, a year-on-year increase of 56%. The firm believes that as key milestones such as Cybercab starting trial production, Optimus commencing mass production, and the tape-out of the AI5 chip advance, Tesla's AI hardware closed loop is continuously being strengthened. Although Tesla’s energy business revenue was $2.408 billion, down 12% year-on-year, full-year energy revenue is expected to gradually return to growth. The report also notes that the robot V3 production line is continuously being implemented and is expected to start mass production in the third quarter, contributing to related component companies’ performance. Furthermore, the jointly constructed semiconductor production line for the AI5 chip and SpaceX is expected to support rapidly growing future AI demand. The firm maintains its Non-GAAP net profit expectations for Tesla at $8.3 billion and $10.1 billion for this year and next respectively, keeps its target price at $500, and an “outperform” rating.