{"id":817081,"date":"2026-07-21T20:31:20","date_gmt":"2026-07-21T20:31:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/817081\/"},"modified":"2026-07-21T20:31:20","modified_gmt":"2026-07-21T20:31:20","slug":"tesla-cash-burn-to-test-investor-faith-in-physical-ai-bets","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/817081\/","title":{"rendered":"Tesla cash burn to test investor faith in physical AI bets"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

A Tesla model Y is charged at a dealership in Buena Park, Calif. Under Elon Musk, the company has shifted its focus beyond EVs to physical AI businesses.Mike Blake\/Reuters<\/p>\n

Tesla TSLA-Q<\/a> is expected to report its first quarterly cash burn in over two years on Wednesday, as its spending on AI and robotics soars, intensifying investor scrutiny over when those bets will pay off.<\/p>\n

CEO Elon Musk has pivoted the electric-vehicle maker\u2019s focus from manufacturing cars to building so-called physical AI businesses such as self-driving taxis and humanoid robots. Much of Tesla\u2019s valuation hangs on that promise.<\/p>\n

However, investors are growing increasingly uneasy as spending on AI infrastructure, including data centres, and manufacturing capacity is projected to climb to US$25-billion this year, outstripping quarterly cash generated by Tesla\u2019s core automotive and energy operations.<\/p>\n

\u201cAs capex more than doubles and free cash flow turns negative, investors are increasingly focused on evidence that Tesla\u2019s spending is strengthening its physical AI moat,\u201d Morgan Stanley analysts wrote in a note.<\/p>\n

Investors have been betting that Tesla\u2019s autonomous-driving technology and robotics ambitions could eventually unlock new, high-margin revenue streams. But progress has been slower than many analysts expected, and Musk has missed some self-imposed deadlines.<\/p>\n

Soon after launching its robotaxi service in Austin, Tex., in April last year, Musk predicted Tesla robotaxis would serve half the U.S. population by the end of 2025. In January, Tesla said the service would expand to seven new cities in the first half of 2026. But its robotaxi network remains confined to Austin, Dallas, Houston in Texas, and Miami in Florida.<\/p>\n

Ahead of Wednesday\u2019s earnings call, the most-voted question on Tesla\u2019s investor-relations site, submitted by a retail investor, was: \u201cWhat is keeping Tesla back from accomplishing these short-term goals that they\u2019ve set for themselves?\u201d<\/p>\n

Nine of the top 10 most-voted questions center around Tesla\u2019s AI-driven bets – robotaxis, Optimus humanoid robots and its Full Self-Driving technology.<\/p>\n

\u201cWhy has growth of robotaxi vehicles stalled? When will we see Cybercab start customer rides?\u201d asked another retail investor.<\/p>\n

Tesla has said that it has started manufacturing its Cybercab vehicle, a tailor-made robotaxi without a steering wheel and pedals. However, the vehicles have not been deployed into a robotaxi network, with Musk saying that the production ramp would be \u201cagonizingly slow.\u201d<\/p>\n

Auto business rebounds<\/p>\n

Tesla delivered a record number of vehicles for the April-to-June period, far exceeding market estimates, as higher oil prices helped drive sales of EVs, especially in Europe.<\/p>\n

Analysts expect Tesla to deliver 1.7 million vehicles in 2026, up 3.9 per cent from last year, which would snap a two-year skid of declining annual deliveries.<\/p>\n

Barclays analysts said investors remained focused on Tesla\u2019s AI ambitions, but a stronger automotive business would help generate the cash needed to finance those investments.<\/p>\n

For the second quarter, however, the vehicle-sales rebound may not be enough to offset heavy spending. Tesla is expected to report negative free cash flow of US$3.3-billion, according to LSEG data.<\/p>\n

Analysts expect Tesla\u2019s second-quarter profit to come in at 50 US cents per share, compared with 40 US cents per share in the same period a year earlier.<\/p>\n

However, Deutsche Bank analysts expect the elimination of upfront Full Self-Driving software purchases earlier this year and low interest-rate financing in May to hit profitability.<\/p>\n

Wall Street expects automotive gross margin excluding regulatory credits of 18.1 per cent in the second quarter, lower than 19.2 per cent in the prior three-month period, according to Visible Alpha data. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: A Tesla model Y is charged at a dealership in Buena Park, Calif.…\n","protected":false},"author":2,"featured_media":817082,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-817081","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/817081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=817081"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/817081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/817082"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=817081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=817081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=817081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}