By the end of the day on 1 May 1941, the German and Italian forces still had the breach and had consolidated their position at Medauuar. They had failed to take Bianca and consolidate that position and had totally failed at driving to the harbor and forcing a surrender. The Germans had started the day with 81 tanks, but by the end of the day had just 35 tanks running. They had 3 Pzkw I, 12 Pzkw II, 12 Pzkw III, 6 Pzkw IV, and two command tanks. However, of the rest that were damaged, only 12 were total losses. The rest could be recovered and repaired. On 2 May, there was a dust storm that made any tank operations impractical.
The British and Australian situation at Tobruk was that they had lost a portion of the perimeter and the enemy had control of Medauuar, the hill that was a prominent feature. General Morshead's plan of defense in depth while leaving the perimeter lightly defended was the reason that the enemy forces had done as well as they had. The Australians had not realized that the Germans intended to take Medauuar. Even if they had, they lacked sufficient units to effectively oppose the attack. The counter attack by the 2/48th Battalion was doomed to fail, as there had been no reconnaissance and in any case, one battalion was inadequate for the task.
The 2/10th Battalion was ordered to link Post S.8 with Bianca. They were to move out at "first light". By 6am, the battalion was moving forward. There had been no opportunity for any scouting. They were forced to move with "map and compass". They had three companies moving forward, although they lacked one platoon that had been redirected earlier. The companies were in position by 6:30am, although it is unclear where they actually were located. The 18th Brigade Headquarters and the division headquarters thought that the companies were in contact with the 2/24th Battalion's "reserve company". This would have been behind the B1 minefield. The 2/10th Battalion was actually as far as 1,500 years further back then the 2/24th Battalion's company. One man carrying a badly wounded man encountered a German motor cycle rider armed with a sub-machine gun. The motor cycle let them pass by without firing. This is based on the account in Vol.III of the Australian Official History.