Tesla reaffirmed plans to spend more than $25 billion on capital projects in 2026, holding to its April guidance even after second-quarter profits missed Wall Street estimates. Shares have dropped more than 16% since the earnings call as the company pours cash into robotaxis, AI computing, and its Optimus robot.
Tesla told investors on its Wednesday earnings call that it still plans to invest more than $25 billion on capital projects by the end of 2026, reaffirming guidance laid out in April. The commitment held even though second-quarter profits landed well below what Wall Street expected.
In the second quarter alone, capex hit $5.8 billion, 142% more than the $2.4 billion Tesla spent in the same period a year earlier.
Since markets closed on Wednesday, Tesla shares had fallen more than 16% as of Friday morning. Over the same stretch, the S&P 500 and the Nasdaq Composite were down about 1.3% and 2.8%, respectively.
Where the money is going
Chief Financial Officer Vaibhav Taneja confirmed the company is on track to spend $25 billion, with more increases expected over the next two to three years. The funds are earmarked for its Robotaxi fleet, AI computing infrastructure, Optimus manufacturing, and semiconductor fabrication.
CEO Elon Musk framed the strategy as speed over thrift, saying on the call: "it's OK to be a little less capital efficient if we get things done sooner."
Robots and new production lines
Optimus, Tesla's humanoid robot, is one of its top priorities; Musk has called it a $10 trillion business in the past. To clear space for first-generation Optimus units, the company pulled its Model S and Model X production lines out of the Fremont plant.
Cybercab, the company's robotaxi, has already begun production at Gigafactory Texas, while Semi production is expected to ramp this year at a new Nevada plant.
A strong top line, weaker margins
Revenue was the bright spot. Sales topped $28.2 billion, a 26% increase from a year earlier and higher than Wall Street had expected.
That was mostly where the good news ended. Gross margins fell from 17.2% to 16.8%, against analyst expectations of 19.4%. Non-GAAP earnings came in at $0.33 per share versus the $0.51 expected.
Tesla says its robotaxis are now live in seven cities, and European registrations rose sharply in June across France, Sweden, Italy, and Portugal. Even so, the stock has fallen more than 35% since its highs at the end of last year.
Source: The Motley Fool
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