Abstract:
Tesla's spending again fell short of Wall Street expectations, casting a shadow over Elon Musk's plans to transform the electric car maker into an artificial intelligence and robotics company. Tesla said in a statement Wednesday that third-quarter capital expenditures totaled $4.73 billion. Data show that analysts on average expected $7.95 billion.
Chief Financial Officer Vaibhav Taneja said on the call that Tesla will lower its 2026 capital expenditure target to US$20 billion from the previously expected more than US$25 billion. Tesla invested $8.3 billion in the first half of this year.
Tesla needs to invest huge amounts of money to push its business towards future development areas such as artificial intelligence, robotics and autonomous driving. This transformation is also seen as a core reason for Tesla's possible merger with SpaceX. Musk said this week that SpaceX and Tesla have begun studying a potential merger deal.
Haris Khurshid, chief investment officer at Karobaar Capital, said: "A decline in capital expenditures is only a good thing if it does not come at the expense of future growth. Considering that Tesla's future valuation depends heavily on Robotaxi and Optimus, I wonder whether these expenditures are simply postponed from one quarter to another, or whether related projects are expanding at a slower pace than expected."
Tesla’s adjusted earnings per share in the third quarter were 48 cents, which was higher than the average analyst estimate. Quarterly revenue was slightly below expectations.
After lowering its capital expenditure target, Tesla's after-hours decline widened to 2.5%. As of Wednesday's close, the stock was down 14% this year.
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