Why Tesla's lower capex plans are worrying investors
Yahoo Finance ·
Why Tesla's lower capex plans are worrying investors Yahoo Finance Video Thu, October 22, 2026 at 8:53 AM EDT TSLA +3.41% The 8:30 Hosts Julie Hyman, Pras Subramanian, and Jake Conley discuss the implications of Tesla's ( TSLA ) lower spending plans. want to talk about Tesla, of course. Um kind of a head scratcher here, right? So the company reporting earnings beat for Q3, right? Uh but the bigger story is spending. Uh Tesla's free cash flow came in at $1.9 billion as opposed to a burn of 4.9 billion. Capex only around 4.7 versus the 7.9 expected. Uh Tesla sees its capex at 20 billion for the year, well below the 25 seen prior. You know, CFO talking about how we're using our we're using our using our deploying capital more efficiently, we're using our cash from operations to fund some of this stuff, but kind of a head scratcher for me because a lot of people expected this to keep going up and up and up. I think there's some concern that it's great for profitability, but also, are you kind of like not are you missing out on the AI spend here? What's going on with Optimus? What's going on with robotaxis? What about Terafab? Like, shouldn't you be plowing money into that? I think that's sort of maybe the concern here. And it's interesting that um Musk also said Optimus is now probably not coming, you know, he like it's not unusual that he pushes back deadlines, right? So now Optimus is going to be shipped he says at the end of next year to corporate customers because they're still working out some kinks with it. So, you know, does that does that mean the kinks don't involve spending more? You know what I mean? Like maybe they're just maybe it's just a Yeah. Like and he even said that 2027 will be more normal, normalize and thinking about tens and billions more in 2028. So. But I don't think anyone actually expected, you know, yes, they started production, they said at at Fremont for. Right, but nobody actually expected Optimus to be now, right? Right? Yeah. Yeah. Right, right. But also, but I I have to say that they said, he said months ago that we would see version three in July. That didn't happen. We'll push it out later. I don't want competitors to see the product. Okay, it's now almost November. We haven't seen version three yet. So, and they're saying that they're they're launch pilot production and it's it's coming out there and it's being used. Can we see that? And he said, well, we'll release a demo video in the coming weeks that won't be pre-programmed stuff. It'll actually be the the the robot on its own doing things. Um, we'll see about that. What's interesting is the quarter actually put the capex aside for a moment, everything else looked pretty good, right? Um earnings per share beat estimates, they had the surprise free cash flow, which is linked to the lower capex, I guess. Um the automotive gross margin, I believe beat estimates, both ex-credits and including. One area that came in way below estimates was energy generation and storage revenue, which had been an area of strength for Tesla for quite a while. And that era seems to have ended for the company.
DYAX Investor Sentiment
Bullish (Long) 53% · Bearish (Short) 47%
263 participants
Related News
- Elon Musk: SpaceX Revenue Could Hit “Somewhere Between $500 Billion and a Trillion” by 2027
- AlphaCheck: Meta, Tesla, and Chip Stocks Dip Amid AI Sector Pressures
- Meta Just Burned Cash for the First Time Since Its IPO
- Apple's $1,999 iPhone Duo hits stores Friday amid limited supplies
- Could California's billionaire tax hit Mark Zuckerberg?
- Should One Cost Scare You About CrowdStrike Stock?
