Tesla reports $1.53 bn in free cash flow amid one-fifth cut to 2026 spending forecast
Tesla generated $1.53 billion in free cash flow in the third quarter, which exceeded market expectations. The company's capital expenditure forecast for 2026 was cut to approximately $20 billion from over $25 billion. Tesla's revenue was flat compared to the previous year but still surpassed estimates, while net income fell 43%. Demand for electric vehicles rose significantly as Tesla delivered…
Tesla reported a strong $1.53 billion in free cash flow for the third quarter, surpassing Wall Street's expectations. The company cut its 2026 spending forecast by a fifth, projecting capital expenditure of around $20 billion, down from an earlier forecast of over $25 billion. The lower spending contributed to the impressive free cash flow, compared to the market's expectation of a cash outflow of $4.92 billion.
While the results were positive, questions have been raised about Tesla's investment plans in artificial intelligence, robotics, and autonomous driving. CEO Elon Musk has been exploring a potential merger between Tesla and SpaceX, and the unexpected cash generation could provide a financial boost ahead of the deal. The company's revenue remained flat compared to the previous year, but it exceeded expectations.
Tesla's automotive gross margin, excluding regulatory credits, reached 18.1% in the quarter, surpassing analysts' estimates. The company delivered 486,532 vehicles, setting it on track for an annual increase in deliveries for the first time in three years. Tesla aims to produce five million vehicles annually by 2030, but the robotaxi rollout has lagged behind Musk's promises.
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