Tesla drops as spending cuts raise questions about AI and robotics plans
Tesla has cut its capital expenditure projection by a fifth and posted a surprise positive free cash flow in the third quarter
On Thursday, Tesla’s shares slid 5% in the pre-market session as the EV maker’s reduced capital spending forecast prompted scrutiny of the pace of investment behind Elon Musk’s AI robotics, and autonomous navigation.
The company dropped its 2026 capital spending forecast to about $20 billion from more than $25 billion after underinvesting in artificial intelligence and automation relative to projections on AI and robotics in the third quarter which led to a surprise positive cash generation.
J.P.Morgan analysts led by Rajat Gupta said in a note, “The delay helps near-term cash burn but also suggests delays in investments that matter for fruition of long-term opportunities.”
Management commentary on Wednesday indicated that proposed expenditure will be scaled-up in 2027 and 2028 as Tesla sustains investments in robotaxi, Optimus, AI compute, and Terafab milestones.
It has been observed that Tesla’s shares have dropped about 14% this year in comparison to the Nasdaq’s roughly 15%. The stock is about 23% trading down from its record intraday high of $498.83 reached in December 2025. Furthermore, Tesla traded at 188.24 times its consensus earnings estimation, compared with 6.58 for Ford and 5.16 for General Motors.
