Tesla's $25 billion spending plan tests investor faith in unproven AI bets
Tesla's $25 billion spending plan for 2026 has raised concerns among investors about the company's unproven AI bets, including self-driving technology and humanoid robots. The company's shares fell nearly 3% on Thursday after it announced the increased capital expenditure plan.
Tesla CEO Elon Musk is asking investors to take a leap of faith on his costly bets in self-driving technology and humanoid robots. The company's 2026 capital expenditure plan has been lifted to over $25 billion, nearly triple last year's $8.53 billion. Tesla expects negative free cash flow for the rest of the year after posting a surprise $1.44 billion surplus in the first quarter. Musk has argued that Tesla is not alone in heavy spending, pointing to other tech companies like Alphabet, Microsoft, and Amazon. However, these companies have established businesses generating significant cash flow, unlike Tesla's businesses still in early development. Tesla's robotaxi service is expanding gradually across a handful of U.S. cities, while its Cybercab is expected to begin volume production later this year.
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