Tesla's Q3 Spending Falls Far Short of Market Expectations

Tesla reported its third-quarter capital spending was $4.73 billion. That more than doubled from a year ago, but still fell far short of the market's expected $7.7 to $7.95 billion, and dropped about $1 billion from the previous quarter.

Tesla also cut its 2026 spending target from over $25 billion to about $20 billion, a 20% drop. Even with less spending, the company still generated about $1.53 billion in free cash flow last quarter, much better than the negative figure analysts expected.

Reuters noted that while this helps short-term cash flow, it may slow Tesla's push into AI, self-driving, the Optimus humanoid robot, and chip making, which need large and steady investments.

Musk admitted on the earnings call that Optimus still faces challenges in supply chains, training data, and robotic hand design. He expects these issues to be resolved by the end of 2027, with customer delivery about a year after that.