NEW YORK, July 24, 2026, 06:05 EDT
- Nasdaq’s main session had ended, while premarket activity continued.
- Tesla stock was pointed to open around $324, up roughly 1.3% from Thursday’s closing level.
- Capital expenditures in the first half consumed 95.9% of operating cash flow.
Tesla projects capital expenditures will surpass $25 billion in 2026. The company spent $8.28 billion in the first half of the year, with second-half expenditures topping $16.7 billion.
This rate would more than double the quarterly average of $4.14 billion recorded in the first half. The projected average for the second half exceeds $8.36 billion.
First-half cash generation reflects the strain. Operating cash flow for the period totaled $8.63 billion, with capex accounting for 95.9% of that figure, resulting in just $352 million remaining.
Quarter results grew tighter as spending picked up pace. Operating cash flow for the second quarter increased 85% to $4.70 billion. Capital expenditures surged 142% to $5.79 billion, resulting in a negative free cash flow of $1.09 billion. This marked the first time in over two years the company reported a quarterly cash outflow.
| Q2 metric | 2025 | 2026 | Year-on-year |
|---|---|---|---|
| Revenue | $22.50 billion | $28.24 billion | up 26% |
| Operating income | $0.92 billion | $0.40 billion | down 57% |
| Operating margin | 4.1% | 1.4% | down 2.7 points |
| Capital expenditure | $2.39 billion | $5.79 billion | up 142% |
| Free cash flow | $0.15 billion | -$1.09 billion | down $1.24 billion |
Q2 results have been released. The figures for the second half indicate minimums and should not be interpreted as company guidance by half.
Shares fell 14.52% to finish Thursday at $319.69 after investors reacted to the increasing gap between cash and profits in the latest quarterly results. Trading volume hit 115.6 million shares, more than double the 65-day average. The Nasdaq Composite slipped 2.2% as the broader market declined.
Tesla shares dropped 6.6% last week ahead of its earnings release. The stock then slid a further 16.1% by Thursday this week.
Sales growth was not the primary letdown. Quarterly revenue surpassed the LSEG forecast by 9.8%. However, adjusted earnings per share were 33 cents, falling short of the expected 51 cents by 35%.
Deliveries of vehicles rose 25% year-on-year to 480,126, while automotive revenue climbed 23% to $20.52 billion. However, automotive gross margin fell to 16.9% from 17.2%.
Revenue from regulatory credits declined 67% year-over-year to $146 million, subtracting $293 million from the company’s quarterly revenue. Spending on research and development increased by 49% as AI initiatives grew, totaling $2.37 billion.
Certain operating divisions lent support over the quarter. Subscriptions for Full Self-Driving grew to roughly 1.5 million, marking a 56% increase. Revenue from services advanced 50% to $4.58 billion. Energy revenue was up 13%, while its gross margin declined to 20.4% compared with 30.3%.
Elon Musk, the Chief Executive, described 2026 as “a massive capex year.” According to him, these investments are expected to “yield incredible returns.” Reuters
Ryan Lee, senior vice president at Direxion, stated that “monetization remains the central concern.” According to Lee, the pace of payback will be key to supporting valuations. Reuters
Based on reported numbers, liquidity is not an urgent limitation. As of June 30, cash and short-term investments reached $43.52 billion, amounting to 2.6 times the required second-half minimum capex.
Execution, approvals, pricing, and demand continue to pose key risks. Tesla additionally cautioned that changes to tariffs and policies may negatively impact costs and margins.
The Nasdaq will begin trading as usual at 09:30 EDT on Friday. Investors are looking ahead to the Federal Reserve’s policy meeting, scheduled for July 28-29. Data for second-quarter GDP, as well as personal income and inflation for June, are due on July 30.
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