{"id":819997,"date":"2026-07-23T03:19:43","date_gmt":"2026-07-23T03:19:43","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/819997\/"},"modified":"2026-07-23T03:19:43","modified_gmt":"2026-07-23T03:19:43","slug":"elon-musks-tesla-reports-negative-free-cash-flow-for-first-time-in-more-than-two-years","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/819997\/","title":{"rendered":"Elon Musk\u2019s Tesla reports negative free cash flow for first time in more than two years"},"content":{"rendered":"

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

A Tesla dealership in Alhambra, Calif. on July 2.Mario Tama\/Getty Images<\/p>\n

Tesla TSLA-Q<\/a> on Wednesday missed analysts\u2019 profit forecasts for the second quarter and, for the first time in more than two years, reported negative free cash flow as the Elon Musk-led EV maker accelerated spending on infrastructure for its AI and robotics ambitions.<\/p>\n

Shares were down about 2.5 per cent in extended trading.<\/p>\n

Musk plans to spend more than US$25-billion this year, nearly triple last year\u2019s US$8.53-billion, as he bets on Tesla\u2019s AI-powered self-driving technology and robotics, over its auto business, which still is the core revenue generator.<\/p>\n

But the pivot is expensive, and while much of Tesla\u2019s valuation hangs on the promise of potentially high-margin revenue streams, the spending is heightening investor scrutiny.<\/p>\n

Thomas Monteiro, senior analyst at Investing.com, said it could become difficult for Tesla to keep up with its recent capital-spending pace as its cash burn worsens.<\/p>\n

\u201cGiven that most of the Tesla premium rests on future narratives, every capex dollar Tesla commits will be judged more harshly than it was a year ago,\u201d he said.<\/p>\n

Adjusted profit in the quarter ended June 30 was 33 cents per share, versus analysts\u2019 average expectation of 51 cents per share, according to data compiled by LSEG.<\/p>\n

Tesla\u2019s profitability was hurt by higher operating expenses driven by AI, lower average selling prices and weaker regulatory credit revenue even as vehicle deliveries rose, the EV maker said on Wednesday.<\/p>\n

Capital expenditure in the quarter came in at US$5.8-billion, compared with the expectation of about US$6.2-billion.<\/p>\n

Tesla reported negative free cash flow of US$1.1-billion, compared with analysts\u2019 expectation for cash burn of US$3.3-billion.<\/p>\n

EV sales in the quarter helped assuage some fears for now. Tesla delivered 480,126 vehicles in the second quarter, above Wall Street expectations and up from 384,122 vehicles a year earlier.<\/p>\n

The Austin, Texas-based automaker reported revenue of US$28.24-billion for the three months ended June 30, compared with analysts\u2019 average estimate of US$25.71-billion.<\/p>\n

Automotive gross margin came in at 16.3 per cent, compared with the expectation of 18.04 per cent, according to Visible Alpha data.<\/p>\n

Tesla also deployed 13.5 GWh of energy storage products in the quarter, up from 8.8 GWh in the first quarter and 9.6 GWh a year earlier.<\/p>\n

Tesla cash burn to test investor faith in physical AI bets<\/a><\/p>\n

But the core automotive business remains under scrutiny as competitors introduce newer models, often at lower price points, while the company continues to rely heavily on its Model 3 compact sedans and Model Y SUVs for volume. Tesla has tried to stimulate demand through lower-priced trims, including stripped-down, affordable versions of the Model 3 and Model Y late last year, and the launch this month of a six-seater variant of the Model Y in the United States, where demand has been hit by the removal of key tax credits last year.<\/p>\n

Wall Street expects Tesla to deliver about 1.7 million vehicles in 2026, according to Visible Alpha data. That would imply growth from last year\u2019s levels, but analysts remain divided over whether the second-quarter rebound reflects sustainable demand or timing effects after a weak first quarter.<\/p>\n

Analysts say sustaining the momentum could be difficult, with third-quarter growth set to face a high bar after a strong performance in the same period last year.<\/p>\n

Investors have increasingly turned their attention to Musk\u2019s push into self-driving technology and robotics, seeking clearer evidence that Tesla\u2019s autonomy narrative is shifting from promise to commercial reality.<\/p>\n

Tesla\u2019s energy generation and storage unit has emerged as a key counterweight to the auto business, helped by demand for grid-scale batteries that support renewable energy, data centres and electricity-network stability. Tesla has said it expanded its unsupervised robotaxi service in Austin and launched unsupervised rides in Dallas and Houston in April. The company also operates a robotaxi service in Miami and expanded the service to Orlando and Tampa, Florida. Tesla has previously identified Phoenix and Las Vegas among future expansion markets.<\/p>\n

The company received approval in April to deploy its advanced driver assistance software \u2013 called Full Self-Driving Supervised \u2013 in the Netherlands. Some other European countries have also allowed the technology following the Dutch approval. A key vote to decide on Europe-wide approval for the technology is expected later this year. Tesla is also pushing for approval in China.<\/p>\n

Tesla\u2019s shares have fallen more than 15 per cent this year. At about US$1.4-trillion, it remains the world\u2019s most valuable automaker by a wide margin, reflecting investor expectations that self-driving software, energy storage, robotaxis and humanoid robots could eventually deliver higher-margin growth than vehicle sales. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: A Tesla dealership in Alhambra, Calif. on July 2.Mario Tama\/Getty Images Tesla TSLA-Q…\n","protected":false},"author":2,"featured_media":819998,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-819997","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","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\/819997","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=819997"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/819997\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/819998"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=819997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=819997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=819997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}