Tesla cuts 2026 capex forecast to $20 billion, posts surprise $1.5 billion cash flow
Tesla cut its 2026 capital spending forecast to about $20 billion, down from more than $25 billion, and reported $1.53 billion in free cash flow for the third quarter. Analysts had expected the carmaker to burn $4.92 billion, according to LSEG data cited by Reuters.
Less spending, more cash
The cash surprise came mostly from spending less, not from higher profits. Thomas Monteiro, a senior analyst at Investing.com, told Reuters: "The main takeaway is that Tesla's surprisingly positive cash flow quarter did not come from stronger profits, but from spending billions less than planned."
Tesla did not say what it would spend less on. Ryan Lee of Direxion told Reuters the lower capex suggested "less of an 'all-in' approach to the AI arms race than one would expect from Elon."
| $ millions | Q3 2025 | Q3 2026 |
|---|---|---|
| Total revenue | 28,095 | 28,046 |
| Automotive revenue | 21,205 | 20,560 |
| Energy generation and storage | 3,415 | 2,881 |
| Services and other | 3,475 | 4,605 |
| Operating income | 1,624 | 718 |
| GAAP net income | 1,373 | 787 |
| Non-GAAP net income | 1,770 | 1,697 |
Source: Tesla Q3 2026 Update (SEC filing).
Demand, margins and robotaxis
Tesla delivered 486,532 vehicles in the quarter. Reuters said that puts it on track to raise annual deliveries for the first time in three years. Tesla said it ended the quarter with its largest passenger-vehicle backlog in four years.
Automotive gross margin excluding regulatory credits was 18.1%, above the 16.7% analysts expected, according to Visible Alpha data cited by Reuters.
Demand is growing rapidly for our vehicles. It's exceeding our production by a significant margin.
The SpaceX question
Musk said on Tuesday that a merger between Tesla and SpaceX was a "good idea", Reuters reported. On Wednesday's call he said he had no more to say on the matter. Reuters said Tesla shares have fallen about 14% this year.
