Tesla's European FSD Debut and Model Farewell Set Stage for Critical Earnings

Tesla gains first EU approval for FSD in the Netherlands, retires Model S/X, and reports Q1 deliveries below estimates. Earnings report due April 22.

Tesla's first-quarter earnings report on April 22, 2026, arrives at a moment of profound transition. The company is simultaneously retiring its flagship models while launching a crucial new service in Europe, all against a backdrop of concerning operational data from the first three months of the year.

The week began with a significant regulatory milestone. On April 10, the Dutch vehicle authority RDW granted type approval for Tesla’s Full Self-Driving (Supervised) software, marking its first official sanction for use on public roads within the European Union. The approval followed an 18-month testing period covering 1.6 million kilometers and the fulfillment of over 400 compliance requirements. Tesla initiated the rollout to Dutch customers the very next day.

Investors should note the precise scope of this development. The approved system is a Level-2 driver-assistance feature requiring constant human supervision, not autonomous driving. The European version, designated 14.2.2.5, also differs functionally from the current 14.3 iteration available in North America. Nonetheless, its strategic importance is clear. Tesla has immediately introduced FSD subscriptions in the Netherlands, priced at 49 euros per month for owners with Enhanced Autopilot and 99 euros for base vehicles. This opens a new revenue stream in a major market, directly supporting CEO Elon Musk’s 2025 compensation target of ten million active FSD subscriptions globally; Tesla reported one million at the end of Q4 2025. The company anticipates the Dutch approval will gain EU-wide recognition by summer 2026, though this remains its own projection, not a confirmed regulatory outcome.

This forward-looking news contrasts sharply with recent history. Tesla has officially ceased production of its Model S and Model X vehicles, a move Musk termed an "honorable retirement" back in January. Since early April, the company has stopped taking custom orders. Global inventory now stands at roughly 596 units, almost exclusively in the US, with Canada and Europe already reporting zero stock. Rather than discounting final units, Tesla raised prices by $15,000 each, setting the Model S’s new base price at $111,380 and the Model X at $116,380.

The freed production capacity at the Fremont plant, originally designed for an annual output of 100,000 units, is slated for repurposing. Tesla plans to use these lines for manufacturing its Optimus humanoid robots, targeting eventual production of up to one million units per year.

Operational challenges are mounting ahead of the earnings call. Tesla’s Q1 2026 vehicle deliveries totaled 358,023, falling short of analyst consensus by approximately 7,600 units. More notably, production exceeded deliveries by more than 50,000 vehicles, signaling persistent demand weakness. The energy storage business saw an even steeper decline, with deployments plunging to 8.8 GWh from 14.2 GWh in the prior quarter.

Wall Street’s focus is now squarely on the quarterly results. Analysts expect, on average, earnings per share of $0.24, which would represent a 60% increase from the year-ago quarter's $0.15. However, estimates show an unusually wide range from $0.09 to $0.44. The stock has shed about 21% since the start of the year and trades roughly 30% below its December peak, languishing well below its 200-day moving average.

Beyond earnings, Musk has hinted at another potential catalyst, stating on X that the long-delayed next-generation Roadster will "probably" be unveiled in late April, promising an "unveil" rather than a simple demo. New trademark filings and patent submissions suggest a redesigned vehicle, with series production expected to begin 12 to 18 months after presentation.

Analyst sentiment remains divided. Among the 43 covering the stock, ratings currently include 15 "Strong Buy," 16 "Hold," and 10 "Strong Sell." How management addresses the dual narrative of softening core demand and nascent growth drivers like FSD and robotics will likely reshape these views and set the stock's trajectory for the coming quarter.