Tesla cuts 2026 capital spending estimate to about $20 billion
Key Facts
Tesla cut its capital spending estimate for 2026 to about $20 billion during its third-quarter earnings call on October 21, according to the Associated Press. The revision lowered the annual investment budget by about a fifth from previous estimates exceeding $25 billion. Even with the adjustment, targeted spending remains above the previous year's level, with the company having spent $8.53 billion in 2025, according to Reuters. Financial statements published by Tesla showed capital spending of $4,732 million in the third quarter of this year. That was down from $5,789 million in the second quarter, as free cash flow returned to positive territory.
Tesla reported free cash flow of $1,531 million in the third quarter, according to its financial disclosure, following an outflow of $1,092 million in the previous quarter. The result beat analysts' expectations reported by Reuters before the earnings release, which pointed to negative free cash flow of $4.92 billion for the same period. The company's operating activities generated $6,263 million in cash during the third quarter, while capital spending declined from the previous quarter. On the income statement, net income attributable to common shareholders was $787 million for the same period, according to the company's results. Total quarterly revenue was $28,046 million in the results accompanying the revision to annual spending estimates.
In its automotive business, Tesla reported deliveries of 486,532 vehicles in the third quarter of 2026, according to its production and deliveries statement. Production in the same period totaled 464,391 vehicles, fewer than the number the company delivered during the quarter. In its energy business, Tesla reported deploying energy storage products with total capacity of 13.7 gigawatt-hours as part of its third-quarter operating results. In the market, the Associated Press reported that Tesla shares fell 3.2% in after-hours trading following the earnings release, alongside the disclosure of its financial performance and revised spending plan. The share move came in extended trading after the results, which the company had scheduled for release after the market close on October 21.
As a backdrop to its investment plan, Tesla held $45,447 million in cash, cash equivalents and short-term investments at the end of September, according to the company's financial statements. Alongside those holdings, Reuters reported that Tesla had secured credit agreements totaling $30 billion in its report on the financing agreements. The company recorded research and development expenses of $2,761 million during the third quarter and announced that "Optimus production has begun in Fremont." In its automotive business, Tesla said "battery availability remained the constraint" on increasing production, as part of its quarterly business update. For its upcoming projects, the company aims to bring superintelligence training compute capacity to 400 megawatts by year-end and plans to begin operating equipment at its semiconductor factory in Austin during 2027.