‘Very significant increase’: Tesla ramps 2026 capital spend plan to $35b for AI, robotics
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More news: Tesla shares settled in after market trade after CEO Elon Musk said investors “should expect to see a very significant increase in capital expenditures” as the electric vehicle maker deepens its AI, robotics and chips commitments.
After initially lifting in after market trade, at 9:42am AEST the stock had fallen 0.25%.
The company is set to spend more than USD25 billion ($34.9 billion), up from an estimated USD20 billion in January, as it continues its pivot towards self-driving taxis and humanoid robots.
What they said: “We’re going to be substantially increasing our investments in the future, so you should expect to see a very significant increase in capital expenditures. I think it’s well justified for a substantially increased future revenue stream,” Musk told investors and analysts.
“Obviously, Tesla is not alone in this. I think you’ve seen in most, if not all, certainly the major technology companies substantially increasing their capital investments. We’re going to be doing the same. I think it’s going to pay off in a very big way.
“We’re investing in and improving our core technologies, battery powertrain, AI software, AI training, chip design, laying the groundwork for significantly increased manufacturing production. We are also strengthening our supply chain across the board, batteries, energy, AI, silicon, everything.”
Tesla shares rise after surprise free cashflow beat
The news: Tesla shares rose 4% in after-hours trading in New York after it beat Wall Street’s profit expectations for a second consecutive quarter and posted a surprise USD1.44 billion in positive free cashflow.
Analysts had forecast a cash burn of up to USD1.86 billion, according to Bloomberg, while Reuters cited LSEG data showing estimates for a burn of USD1.43 billion.
The numbers: Adjusted earnings of 41 cents a share beat the 34-cent analyst consensus, while gross margin of 21.1% came in well above estimates.
The free cashflow surprise was driven in part by capital expenditure of just USD2.5 billion, roughly half the quarterly run-rate implied by Tesla’s USD20 billion full-year spending guidance, Bloomberg noted.
Vehicle deliveries rose 6.3% to 358,023 units, though it was Tesla’s second-worst sales quarter since 2022. Energy storage revenue fell 12% year-on-year and deployments of 8.8 gigawatt-hours were the lowest in a year, according to Bloomberg.
What they said: Tesla said demand was rebounding in North America, EMEA, Asia-Pacific and South America.
The company added it had expanded its robotaxi service to small areas of Dallas and Houston, and confirmed the Cybercab and Semi remain on schedule for volume production this year.
“We will manage the businesses such that we ensure a strong balance sheet, maintaining sufficient liquidity to fund our product roadmap, long-term capacity expansion plans — including further vertical integration — and other expenses,” the company said.
“We expect our hardware related profits to be accompanied by an acceleration of AI, software and fleet-based profits.”
The sources: Tesla , Bloomberg, Reuters, The Wall Street Journal
