Is Tesla-SpaceX tie-up becoming more than just speculation? By Investing.com

Investing.com -- Tesla's first-quarter results, due Wednesday, are unlikely to offer much reassurance on the company's robotaxi ambitions, and that, analysts at Jefferies say, may be enough to keep merger speculation with SpaceX alive.

"Q1 results will show further widening of the gap between vision and execution and, barring a convincing announcement on robotaxi roll-out, may fuel concern about funding and raise the logic of an eventual merger with SpaceX," analysts led by Philippe Houchois said in a note.

Jefferies maintained a Hold rating on the stock and raised its price target to $350 from $300.

The trigger for renewed merger talk comes amid a widening gap between Tesla's ambitions and its near-term execution. Jefferies forecasts Tesla will report Q1 revenue of $21.2 billion, up 10% year-over-year but well below the prior quarter, with an operating margin below 3% and cash burn of around $1.9 billion.

Looking further ahead, the bank projects negative free cash flow of roughly $5.5 billion in 2026 as capital expenditure ramps sharply to $19-20 billion annually.

The robotaxi business, which Tesla has said it aims to launch across 25-50% of potential U.S. markets by year-end, remains the central uncertainty.

Analysts believe that those ambitions "look beyond reach," with permitting hurdles and questions around lidar-less Full Self-Driving (FSD) technology still unresolved. They do not model any revenue from running robotaxis until 2027.

Humanoid robots face a similarly long runway, with Jefferies noting the field is already crowded and commercial scale even more distant.

Despite the near-term pressures, the analysts acknowledged that Tesla's "vertically integrated business model and ability to deliver funding and industrial scale" remain unique strengths against competitors who are "also moving slowly and facing higher capital costs."