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And four more things we learned from Tesla’s Q1 earnings call.

Tesla doesn’t want to talk about its cars — or at least, not about the cars that have steering wheels and human drivers.
Despite weeks of reports about Tesla’s manufacturing and sales woes — price cuts, recalls, and whether a new, cheaper model would ever come to fruition — CEO Elon Musk and other Tesla executives devoted their quarterly earnings call largely to the company's autonomous driving software. Musk promised that the long-awaited program would revolutionize the auto industry (“We’re putting the actual ‘auto’ in automobile,” as he put it) and lead to the “biggest asset appreciation in history” as existing Tesla vehicles got progressively better self-driving capabilities.
In other Tesla news, car sales are falling, and a new, cheaper vehicle will not be constructed on an all-new platform and manufacturing line, which would instead by reserved for a from-the-ground-up autonomous vehicle.
Here are five big takeaways from the company's earnings and conference call.
The company reported that its “total automotive revenues” came in at $17.4 billion in the first quarter, down 13% from a year ago. Its overall revenues of $21.3 billion, meanwhile, were down 9% from a year ago. The earnings announcement included a number of explanations for the slowdown, which was even worse than Wall Street analysts had expected.
Among the reasons Tesla cited for the disappointing results were arson at its Berlin factory, the obstruction to Red Sea shipping due to Houthi attacks from Yemen, plus a global slowdown in electric vehicle sales “as many carmakers prioritize hybrids over EVs.” The combined effects of these unfortunate events led the company to undertake a well-publicized series of price cuts and other sweeteners for buyers, which dug further into Tesla’s bottom line. Tesla’s chief financial officer, Vaibhav Taneja, said that the company’s free cash flow was negative more than $2 billion, largely due to a “mismatch” between its manufacturing and actual sales, which led to a buildup of car inventory.
The bad news was largely expected — the company’s shares had fallen 40% so far this year leading up to the first quarter earnings, and the past few weeks have featured a steady drumbeat of bad news from the automaker, including layoffs and a major recall. The company’s profits of $1.1 billion were down by more than 50%, short of Wall Street’s expectations — and yet still, Tesla shares were up more than 10% in after-hours trading following the shareholder update and earnings call.
The strange thing about Tesla is that it makes the overwhelming majority of its money from selling cars, but has become the world’s most valuable car company thanks to investors thinking that it’s more of an artificial intelligence company. It’s not uncommon for Tesla CEO Elon Musk and his executives to start talking about their Full Self-Driving technology and autonomous driving goals when the company’s existing business has hit a rough patch, and today was no exception.
Tesla’s value per share was about 33 times its earnings per share by the end of trading on Monday, comparable to how investors evaluate software companies that they expect to grow quickly and expand profitability in the future. Car companies, on the other hand, tend to have much lower valuations compared to their earnings — Ford’s multiple is 12, for instance, and GM’s is 6.
Musk addressed this gap directly on the company’s earnings call. He said that Tesla “should be thought of as an AI/robotics company,” and that “if you value Tesla as an auto company, that’s the wrong framework.” To emphasize just how much the company is pivoting around its self-driving technology, Musk said that “if somebody believes Tesla is not going to solve autonomy they should not be an investor in the company.”
One reason investors value Tesla so differently relative to its peers is that they do, actually, expect the company will make a lot of money using artificial intelligence. No doubt with that in mind, executives made sure to let everyone know that its artificial intelligence spending was immense: The company’s free cash flow may have been negative more than $2 billion, but $1 billion of that was in spending on AI infrastructure. The company also said that it had “increased AI training compute by more than 130%” in the first quarter.
“The future is not only electric, but also autonomous,” the company’s investor update said. “We believe scaled autonomy is only possible with data from millions of vehicles and an immense AI training cluster. We have, and continue to expand, both.”
Musk described the company’s FSD 12 self-driving software as “profound” and said that “it’s only a matter of time before we exceed the reliability of humans, and not much time at that.”
The biggest open question about Tesla is what would happen with its long-promised Model 2, a sub-$30,000 EV that would, in theory, have mass appeal. Reuters reported that the project had been cancelled and that Tesla was instead devoting its resources to another long-promised project, a self-driving ride-hailing vehicle called the “robotaxi.”
Musk tweeted that Reuters was “lying” but never directly denied the report or identified what was wrong with it, instead saying that the robotaxi would be unveiled in August. He later followed up to say that “going balls to the wall for autonomy is a blindingly obvious move. Everything else is like variations on a horse carriage.”
Before the call, Wall Street analysts were begging for a confirmation that newer, cheaper models besides a robotaxi were coming.
“If Tesla does not come out with a Model 2 the next 12 to 18 months, the second growth wave will not come,” Wedbush Securities analyst Dan Ives wrote in a note last week. “Musk needs to recommit to the Model 2 strategy ALONG with robotaxis but it CANNOT be solely replaced by autonomy.”
Anyone who expected to get their answers on today’s call, though, was likely kidding themselves.
Tesla announced today it had updated its planned vehicle line-up to “accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” and that “these new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms.” Musk added on the company’s earnings call that a new model would not be “contingent on any new factory or massive new production line.”
Some analysts attributed the share pricing popping after hours to this line, although it’s unclear just how new this new car would be.
Tesla’s shareholder update indicated that any new, cheaper vehicle would not necessarily be entirely new nor unlock massive new savings through an all-new production process. “This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times,” the update said.
Of the robotaxi, meanwhile, the company said it will “continue to pursue a revolutionary ‘unboxed’ manufacturing strategy,” indicating that just the ride-hailing vehicle would be built entirely on a new platform.
Musk also discussed how a robotaxi network could work, saying that it would be a combination of Tesla-operated robotaxis and owners putting their own cars into the ride-hailing fleet. When asked directly about its schedule for a $25,000 car, Musk quickly pivoted to discussing autonomy, saying that when Teslas are able to self-drive without supervision, it will be “the biggest asset appreciation in history,” as existing Teslas became self-driving.
When asked whether any new vehicles would “tweaks” or “new models,” Musk dodged the question, saying that they had said everything they had planned to say on the new cars.
One bright spot on the company’s numbers was the growth in its sales of energy systems, which are tilting more and more toward the company’s battery offerings.
Tesla said it deployed just over 4 gigawatts of energy storage in the first quarter of the year, and that its energy revenue was up 7% from a year ago. Profits from the business more than doubled.
Tesla’s energy business is growing faster than its car business, and Musk said it will continue to grow “significantly faster than the car business” going forward.
Revenues from “services and others,” which includes the company’s charging network, was up by a quarter, as more and more other electric vehicle manufacturers adopt Tesla’s charging standard.
Another speculative Tesla project is Optimus, which the company describes as a “general purpose, bi-pedal, humanoid robot capable of performing tasks that are unsafe, repetitive or boring.” Like many robotics projects, the most the public has seen of Optimus has been intriguing video content, but Musk said that it was doing “factory tasks in the lab” and that it would be in “limited production” in a factory doing “useful tasks” by the end of this year. External sales could begin “by the end of next year,” Musk said.
But as with any new Tesla project, these dates may be aspirational. Musk described them as “just guesses,” but also said that Optimus could “be more valuable than everything else combined.”
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Rob takes Jesse through our battery of questions.
Every year, Heatmap asks dozens of climate scientists, officials, and business leaders the same set of questions. It’s an act of temperature-taking we call our Insiders Survey — and our 2026 edition is live now.
In this week’s Shift Key episode, Rob puts Jesse through the survey wringer. What is the most exciting climate tech company? Are data centers slowing down decarbonization? And will a country attempt the global deployment of solar radiation management within the next decade? It’s a fun one! Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: Next question — you have to pick one, and then you’ll get a free response section. Do you think AI and data centers energy needs are significantly slowing down decarbonization, yes or no?
Jesse Jenkins: Significantly. Yeah, I guess significantly would … yes, I think so. I think in general, the challenge we have with decarbonization is we have to add new, clean supplies of energy faster than demand growth. And so, in order to make progress on existing emissions, you have to exceed the demand growth, meet all of that growth with clean resources, and then start to drive down emissions.
If you look at what we’ve talked about — are China’s emissions peaking, or global emissions peaking? I mean, that really is a game. It’s a race between how fast we can add clean supply and how fast demand for energy’s growing. And so in the power sector in particular, an area where we’ve made the most progress in recent years in cutting emissions, now having a large, and rapid growth in electricity demand for a whole new sector of the economy — and one that doesn’t directly contribute to decarbonization, like, say, in contrast to electric vehicles or electrifying heating —certainly makes things harder. It just makes that you have to run that race even faster.
I would say in the U.S. context in particular, in a combination of the Trump policy environment, we are not keeping pace, right? We are not going to be able to both meet the large demand growth and eat into the substantial remaining emissions that we have from coal and gas in our power sector. And in particular, I think we’re going to see a lot more coal generation over the next decade than we would’ve otherwise without both AI and without the repeal of the Biden-era EPA regulations, which were going to really drive the entire coal fleet into a moment of truth, right? Are they gonna retrofit for carbon capture? Are they going to retire? Was basically their option, by 2035.
And so without that, we still have on the order of 150 gigawatts of coal-fired power plants in the United States, and many of those were on the way out, and I think they’re getting a second lease on life because of the fact that demand for energy and particularly capacity are growing so rapidly that a lot of them are now saying, Hey, you know what, we can actually make quite a bit of money if we stick around for another 5, 10, 15 years. So yeah, I’d say that’s significantly harder.
That isn’t an indictment to say we shouldn’t do AI. It’s happening. It’s valuable, and we need to meet as much, if not all of that growth with clean energy. But then we still have to try to go faster, and that’s the key.
Mentioned:
This year’s Heatmap Insiders Survey
Last year’s Heatmap Insiders Survey
The best PDF Jesse read this year: Flexible Data Centers: A Faster, More Affordable Path to Power
The best PDF Rob read this year: George Marshall’s Guide to Merleau-Ponty's Phenomenology of Perception
This episode of Shift Key is sponsored by …
Heatmap Pro brings all of our research, reporting, and insights down to the local level. The software platform tracks all local opposition to clean energy and data centers, forecasts community sentiment, and guides data-driven engagement campaigns. Book a demo today to see the premier intelligence platform for project permitting and community engagement.
Music for Shift Key is by Adam Kromelow.
They still want to decarbonize, but they’re over the jargon.
Where does the fight to decarbonize the global economy go from here? The past 12 months, after all, have been bleak. Donald Trump has pulled the United States out of the Paris Agreement (again) and is trying to leave a precursor United Nations climate treaty, as well. He ripped out half the Inflation Reduction Act, sidetracked the Environmental Protection Administration, and rechristened the Energy Department’s in-house bank in the name of “energy dominance.” Even nonpartisan weather research — like that conducted by the National Center for Atmospheric Research — is getting shut down by Trump’s ideologues. And in the days before we went to press, Trump invaded Venezuela with the explicit goal (he claims) of taking its oil.
Abroad, the picture hardly seems rosier. China’s new climate pledge struck many observers as underwhelming. Mark Carney, who once led the effort to decarbonize global finance, won Canada’s premiership after promising to lift parts of that country’s carbon tax — then struck a “grand bargain” with fossiliferous Alberta. Even Europe seems to dither between its climate goals, its economic security, and the need for faster growth.
Now would be a good time, we thought, for an industry-wide check-in. So we called up 55 of the most discerning and often disputatious voices in climate and clean energy — the scientists, researchers, innovators, and reformers who are already shaping our climate future. Some of them led the Biden administration’s climate policy from within the White House; others are harsh or heterodox critics of mainstream environmentalism. And a few more are on the front lines right now, tasked with responding to Trump’s policies from the halls of Congress — or the ivory minarets of academia.
We asked them all the same questions, including: Which key decarbonization technology is not ready for primetime? Who in the Trump administration has been the worst for decarbonization? And how hot is the planet set to get in 2100, really? (Among other queries.) Their answers — as summarized and tabulated by my colleagues — are available in these pages.
You can see whether insiders think data centers are slowing down decarbonization and what folks have learned (or, at least, say they’ve learned) from the repeal of clean energy tax credits in the Inflation Reduction Act.
But from many different respondents, a mood emerged: a kind of exhaustion with “climate” as the right frame through which to understand the fractious mixture of electrification, pollution reduction, clean energy development, and other goals that people who care about climate change actually pursue. When we asked what piece of climate jargon people would most like to ban, we expected most answers to dwell on the various colors of hydrogen (green, blue, orange, chartreuse), perhaps, or the alphabet soup of acronyms around carbon removal (CDR, DAC, CCS, CCUS, MRV). Instead, we got:
“‘Climate.’ Literally the word climate, I would just get rid of it completely,” one venture capitalist told us. “I would love to see people not use 'climate change' as a predominant way to talk to people about a global challenge like this,” seconded a former Washington official. “And who knows what a ‘greenhouse gas emission’ is in the real world?” A lobbyist agreed: “Climate change, unfortunately, has become too politicized … I’d rather talk about decarbonization than climate change.”
Not everyone was as willing to shift to decarbonization, but most welcomed some form of specificity. “I’ve always tried to reframe climate change to be more personal and to recognize it is literally the biggest health challenge of our lives,” the former official said. The VC said we should “get back to the basics of, are you in the energy business? Are you in the agriculture business? Are you in transportation, logistics, manufacturing?”
“You're in a business,” they added, “there is no climate business.”
Not everyone hated “climate” quite as much — but others mentioned a phrase including the word. One think tanker wanted to nix “climate emergency.” Another scholar said: “I think the ‘climate justice’ term — not the idea — but I think the term got spread so widely that it became kind of difficult to understand what it was even referring to.” And one climate scientist didn’t have a problem with climate change, per se, but did say that people should pare back how they discuss it and back off “the notion that climate change will result in human extinction, or the sudden and imminent end to human civilization.”
There were other points of agreement. Four people wanted to ban “net zero” or “carbon neutrality.” One scientist said activists should back off fossil gas — “I know we’re always trying to try convince people of something, but, like, the entire world calls it ’natural gas’” — and another scientist said that they wished people would stop “micromanaging” language: “People continually changing jargon to try and find the magic words that make something different than it is — that annoys me.”
Two more academics added they wish to banish discussion of “overshoot”: “It’s not clear if it's referring to temperatures or emissions — I just don't think it's a helpful frame for thinking about the problem.”
“Unit economics,” “greenwashing,” and — yes — the whole spectrum of hydrogen colors came in for a lashing. But perhaps the most distinctive ban suggestion came from Todd Stern, the former chief U.S. climate diplomat, who negotiated the Kyoto Protocol and the Paris Agreement.
“I hate it when people say ’are you going to COP?’” he told me, referring to the United Nations’ annual climate summit, officially known as the Conference of the Parties. His issue wasn’t calling it “COP,” he clarified. It was dropping the definite article.
“The way I see it, no one has the right to suddenly become such intimate pals with ‘COP.’ You go to the ball game or the conference or what have you. And you go to ‘the COP,’” he said. “I am clearly losing this battle, but no one will ever hear me drop the ‘the.’”
Now, since I talked to Stern, the United States has moved to drop the COP entirely — with or without the “the” — because Trump took us out of the climate treaty under whose aegis the COP is held. But precision still counts, even in unfriendly times. And throughout the rest of this package, you’ll find insiders trying to find a path forward in thoughtful, insightful, and precise ways.
You’ll also find them remaining surprisingly upbeat — and even more optimistic, in some ways, than they were last year. Twelve months ago, 30% of our insider panel thought China would peak its emissions in the 2020s; this year, a plurality said the peak would come this decade. Roughly the same share of respondents this year as last year thought the U.S. would hit net zero in the 2060s. Trump might be setting back American climate action in the near term. But some of the most important long-term trends remain unchanged.
OUR PANEL INCLUDED… Gavin Schmidt, director of the NASA Goddard Institute for Space Studies | Ken Caldeira, senior scientist emeritus at the Carnegie Institution for Science and visiting scholar at Stanford University | Kate Marvel, research physicist at the NASA Goddard Institute for Space Studies | Holly Jean Buck, associate professor of environment and sustainability at the University at Buffalo | Kim Cobb, climate scientist and director of the Institute at Brown for Environment and Society | Jennifer Wilcox, chemical engineering professor at the University of Pennsylvania and former U.S. Assistant Secretary for Fossil Energy and Carbon Management | Michael Greenstone, economist and director of the Energy Policy Institute at the University of Chicago | Solomon Hsiang, professor of global environmental policy at Stanford University | Chris Bataille, global fellow at Columbia University’s Center on Global Energy Policy | Danny Cullenward, senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania | J. Mijin Cha, environmental studies professor at UC Santa Cruz and fellow at Cornell University’s Climate Jobs Institute | Lynne Kiesling, director of the Institute for Regulatory Law and Economics at Northwestern University | Daniel Swain, climate scientist at the University of California Agriculture and Natural Resources | Emily Grubert, sustainable energy policy professor at the University of Notre Dame | Jon Norman, president of Hydrostor | Chris Creed, managing partner at Galvanize Climate Solutions | Amy Heart, senior vice president of public policy at Sunrun | Kate Brandt, chief sustainability officer at Google | Sophie Purdom, managing partner at Planeteer Capital and co-founder of CTVC | Lara Pierpoint, managing director at Trellis Climate | Andrew Beebe, managing director at Obvious Ventures | Gabriel Kra, managing director and co-founder of Prelude Ventures | Joe Goodman, managing partner and co-founder of VoLo Earth Ventures | Erika Reinhardt, executive director and co-founder of Spark Climate Solutions | Dawn Lippert, founder and CEO of Elemental Impact and general partner at Earthshot Ventures | Rajesh Swaminathan, partner at Khosla Ventures | Rob Davies, CEO of Sublime Systems | John Arnold, philanthropist and co-founder of Arnold Ventures | Gabe Kleinman, operating partner at Emerson Collective | Amy Duffuor, co-founder and general partner at Azolla Ventures | Amy Francetic, managing general partner and founder of Buoyant Ventures | Tom Chi, founding partner at At One Ventures | Francis O’Sullivan, managing director at S2G Investments | Cooper Rinzler, partner at Breakthrough Energy Ventures | Gina McCarthy, former administrator of the U.S. Environmental Protection Agency | Neil Chatterjee, former commissioner of the Federal Energy Regulatory Commission | Representative Scott Peters, member of the U.S. House of Representatives | Todd Stern, former U.S. special envoy for climate change | Representative Sean Casten, member of the U.S. House of Representatives | Representative Mike Levin, member of the U.S. House of Representatives | Zeke Hausfather, climate research lead at Stripe and research scientist at Berkeley Earth | Shuchi Talati, founder and executive director of the Alliance for Just Deliberation on Solar Geoengineering | Nat Bullard, co-founder of Halcyon | Bill McKibben, environmentalist and founder of 350.org | Ilaria Mazzocco, senior fellow at the Center for Strategic and International Studies | Leah Stokes, professor of environmental politics at UC Santa Barbara | Noah Kaufman, senior research scholar at Columbia University’s Center on Global Energy Policy | Arvind Ravikumar, energy systems professor at the University of Texas at Austin | Jessica Green, political scientist at the University of Toronto | Jonas Nahm, energy policy professor at Johns Hopkins SAIS | Armond Cohen, executive director of the Clean Air Task Force | Costa Samaras, director of the Scott Institute for Energy Innovation at Carnegie Mellon University | John Larsen, partner at Rhodium Group | Alex Trembath, executive director of the Breakthrough Institute | Alex Flint, executive director of the Alliance for Market Solutions
The Heatmap Insiders Survey of 55 invited expert respondents was conducted by Heatmap News reporters during November and December 2025. Responses were collected via phone interviews. All participants were given the opportunity to record responses anonymously. Not all respondents answered all questions.
Plus, which is the best hyperscaler on climate — and which is the worst?
The biggest story in energy right now is data centers.
After decades of slow load growth, forecasters are almost competing with each other to predict the most eye-popping figure for how much new electricity demand data centers will add to the grid. And with the existing electricity system with its backbone of natural gas, more data centers could mean higher emissions.
Hyperscalers with sustainability goals are already reporting higher emissions, and technology companies are telling investors that they plan to invest hundreds of billions, if not trillions of dollars, into new data centers, increasingly at gigawatt scale.
And yet when we asked our Heatmap survey participants “Do you think AI and data centers’ energy needs are significantly slowing down decarbonization?” only about 34% said they would, compared to 66% who said they wouldn’t.
There were some intriguing differences between different types of respondents. Among our “innovator” respondents — venture capitalists, founders, and executives working at climate tech startups — the overwhelming majority said that AI and data centers are not slowing down decarbonization. “I think it’s the inverse — I think we want to launch the next generation of technologies when there’s demand growth and opportunity to sell into a slightly higher priced, non-commoditized market,” Joe Goodman co-founder and managing partner at VoLo Earth Ventures, told us.
Not everyone in Silicon Valley is so optimistic, however. “I think in a different political environment, it may have been a true accelerant,” one VC told us. “But in this political environment, it’s a true albatross because it’s creating so many more emissions. It’s creating so much stress on the grid. We’re not deploying the kinds of solutions that would be effective."
Scientists were least in agreement on the question. While only 47% of scientists thought the growth of data centers would significantly slow down decarbonization, most of the pessimistic camp was in the social sciences. In total, over 62% of the physical scientists we surveyed thought data centers weren’t slowing down decarbonization, compared to a third of social scientists.
Michael Greenstone, a University of Chicago economist, told us he didn’t see data centers and artificial intelligence as any different from any other use of energy. “I also think air conditioning and lighting, computing, and 57,000 other uses of electricity are slowing down decarbonization,” he said. The real answer is the world is not trying to minimize climate change.”
Mijin Cha, an assistant professor of environment studies at the University of California Santa Cruz, was even more gloomy, telling us, “Not only do I think it’s slowing down decarbonization, I think it is permanently extending the life of fossil fuels, especially as it is now unmitigated growth.”
Some took issue with the premise of the question, expressing skepticism of the entire AI industry. “I’m actually of the opinion that most of the AI and data center plans are a massive bubble,” a scientist told us. “And so, are there plans that would be disruptive to emissions? Yes. Are they actually doing anything to emissions yet? Not obvious.”
We also asked respondents to name the “best” and “worst” hyperscalers, large technology companies pursuing the data center buildout. Many of these companies have some kind of renewables or sustainability goal, but there are meaningful differences among them. Google and Microsoft look to match their emissions with non-carbon-power generation in the same geographic area and at the same time. The approach used by Meta and Amazon, on the other hand, is to develop renewable projects that have the biggest “bang for the buck” on global emissions by siting them in areas with high emissions that the renewable generation can be said to displace.
Among our respondents, the 24/7 “time and place” approach is the clear winner.
Google was the “best” pick for 19 respondents, including six who said “Google and Microsoft.” By contrast, Amazon and Meta had just three votes combined.
As for the “worst,” there was no clear consensus, although two respondents from the social sciences picked “everyone besides Microsoft and Google” and “everyone but Google and Microsoft.” Another one told us, “The best is a tie between Microsoft and Google. Everyone else is in the bottom category.”
A third social scientist summed it up even more pungently. “Google is the best, Meta is the worst. Evil corporation” — though with more expletives than that.
The Heatmap Insiders Survey of 55 invited expert respondents was conducted by Heatmap News reporters during November and December 2025. Responses were collected via phone interviews. All participants were given the opportunity to record responses anonymously. Not all respondents answered all questions.