Tesla lowered its 2026 capital spending forecast to about $20 billion as a surprise third-quarter cash surplus strengthened the electric vehicle maker’s liquidity despite weaker profit.
Tesla generated $1.531 billion in free cash flow for the quarter ended Sept. 30. Analysts in a consensus compiled by the company had projected a $4.506 billion outflow. Capital spending of $4.732 billion was below their $7.771 billion estimate, while operating cash flow reached $6.263 billion, above the $3.267 billion estimate.
Tesla Chief Financial Officer Vaibhav Taneja gave the revised spending outlook on the company’s Oct. 21 earnings call. Tesla had previously expected to spend more than $25 billion in 2026 on projects including artificial intelligence computing, manufacturing, research and charging facilities. The revised forecast did not specify which projects would receive less funding.
Free cash flow recovered from a $1.092 billion outflow in the second quarter but remained below the $3.990 billion generated a year earlier. Tesla ended September with $45.447 billion in cash, cash equivalents and short-term investments, an increase of $1.9 billion from the previous quarter. The company said positive free cash flow was the main reason for that rise.
Profit moved in the opposite direction. As EconoTimes reported in its earlier coverage of Tesla’s quarterly results, operating income declined 56% from a year earlier to $718 million. Revenue was little changed at $28.046 billion. Reuters reported that Tesla shares reversed an initial after-hours gain and traded lower.
The larger cash balance comes as independent directors at Tesla and SpaceX consider a possible combination. Tesla CEO Elon Musk said on an Oct. 20 SpaceX call that committees at both companies were discussing the idea. He said a conflict of interest excluded him from those discussions. No terms have been agreed, and Musk gave no date for a decision.
