Tesla reported a notable resurgence in electric vehicle (EV) demand, especially in Europe with countries like France and Germany experiencing over 150% quarter-over-quarter growth in deliveries. The company indicated it has its highest order backlog in over two years, driven in part by rising gasoline prices. Full Self-Driving (FSD) subscriptions also saw a 16.4% sequential increase.
Despite these positives, the rollout of Tesla’s robotaxis is slower than anticipated, with CEO Elon Musk stating that unsupervised FSD capabilities may be available only in a limited number of states by late 2026. Additionally, older models will require hardware upgrades to utilize these features, leading to significant capital expenditures projected at $25 billion for 2026. This will impact the company’s near-term free cash flow.
Overall, while the outlook on EV sales and FSD subscriptions remains positive, the cautious approach to robotaxi deployment introduces uncertainty for investors.
