Dive Brief:

• Electric vehicle maker Tesla expects its capital expenditures to total over $25 billion for its full-year 2026, as the company continues to target expansion in areas such as its robotaxi service and artificial intelligence, executives said during its second quarter earnings call.
• “Capex will grow for the next two or three years as we expand our Robotaxi fleet, expand our production capacity for Optimus, make investments for semiconductor fab, install solar manufacturing capacity, and AI compute infrastructure, in addition to all the other expansions we'll do for other manufacturing for automotive,” CFO Vaibhav Taneja said Wednesday, according to a transcript.
• The business expects 2026 to be a “massive capex year,” CEO Elon Musk added during the call. “I'm confident that all the things that we're investing in will yield incredible returns.”

Dive Insight:

Tesla’s capital expenditures shot up by 142% year-over-year to nearly $6 billion, according to its shareholder deck for the quarter ended June 30. The jump in capex was the main contribution behind the EV maker reporting negative free cash flow for the quarter, Taneja said — free cash flow plummeted by 848% YoY to about negative $1 billion, according to its earnings results.

As well as making investments in key areas, Tesla is also being “opportunistic” when it comes to securing certain debt facilities, targeting a borrowing capacity of up to $30 billion, Taneja said.

“We believe this is the right strategy to position the company for the next era,” he said, noting Tesla’s progress on such goals will be “non-linear,” but that “the path to amazing abundance is ever challenging and requires making bold bets.”

While company executives touted plans for more spending and pointed to a rise in vehicle deliveries and orders —with the EV maker exiting the quarter with its largest order backlog since 2023, Taneja noted — concerns over the company’s ability to meet projected targets and weaker profits led Tesla shares to dip by approximately 14% on Thursday after its earnings report.

Tesla reported GAAP net income of $1.1 billion for the quarter ended June 30, a 5% dip from the prior year period, according to its earnings deck. While detailing plans to continue expanding its robotaxi fleet, meanwhile, Musk struck a more cautious tone than previous quarters in describing such efforts, noting Tesla is prioritizing safety.

“We don't want to injure anyone. We're going as fast as humanly possible in scaling Robotaxi, but while trying to ensure that we do not harm anyone at all, and ideally do not even run over a pet,” Musk said Wednesday. The company has expanded its robotaxi service to seven markets in the U.S., Taneja said Wednesday, and has begun test drives of its “Cybercab” product.

The company’s robotaxi fleet, alongside its self-driving efforts, has faced challenges since its original rollout last June, including slower-than-expected expansion to new markets and litigation from shareholders, regulators and consumers.

Tesla, Musk, Taneja and the company’s former CFO, Zachary Kirkhorn, were named in an ongoing class action suit last August in a Texas court which alleges the executives understated the risk of its robotaxi products, misleading shareholders, CFO Dive reported at the time. The company was also ordered to pay $240 million to victims of a crash related to its autopilot technology in August 2025 by a Florida jury, CFO Dive previously reported.

The EV maker has also clashed with regulators such as the California Department of Motor Vehicles, which in 2025 found Tesla had used the terms “autopilot” and “full self-driving” misleadingly, according to reports.

In another nod to growth, Tesla executives on Wednesday pointed to the positive impacts of Tesla’s connection to fellow Musk-run entity SpaceX, which went public in June in the largest initial public offering in history at a valuation of nearly $2 trillion.

Tesla’s SpaceX holdings contributed to a mark-to-market gain of $1 billion in the company’s net income for the quarter, Taneja said.

Musk continued to play coy regarding rumors of a potential merger between the two entities on the call.

“As you can tell from all the many collaborations on so many fronts with SpaceX, there's more and more overlap, especially with Terafab, that's really going to be a gigantic project,” he said in response to an analyst question on the matter. “Obviously, we can't talk about combining companies and that kind of thing on an earnings call. It's got to be done with the appropriate process.”