NEW YORK, July 25, 2026, 15:08 EDT — U.S. markets have closed.
- Tesla finished Friday at $313.03, marking a 17.8% decline for the week.
- Initial estimates show that more than $16.7 billion in capital spending will be needed for the second half.
- Record deliveries were reported alongside a negative free cash flow totaling $1.09 billion.
Tesla NASDAQ:TSLA dropped 17.8% last week, even as it reported record quarterly deliveries. The stock ended at $313.03, its lowest closing price in close to a year. The Nasdaq Composite declined 2.1%, putting Tesla 15.7 percentage points below the index.
After Wednesday’s results, selling pressure increased. Tesla shares dropped 14.5% on Thursday, followed by a further 2.1% decline on Friday. Trading volume on Thursday was 3.8 times higher than Wednesday’s.
Focus among investors moved from vehicle demand to cash flow. Tesla used $8.28 billion in the first half, and maintains an outlook for 2026 capital expenditures to exceed $25 billion.
This results in over $16.72 billion remaining for the second half. An early estimate of the run-rate points to more than $8.36 billion per quarter, which is 44% higher than the second-quarter record of $5.79 billion. These figures are not official company projections.
The necessary six-month expenditure represents 38% of liquidity at the end of the quarter. Some of this sum would be balanced by operating cash inflows. As of June 30, Tesla reported $43.52 billion in cash and short-term investments.
The gap in cash conversion expanded significantly:
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenue | $28.24 billion | $22.50 billion | +26% |
| Vehicle deliveries | 480,126 | 384,122 | +25% |
| Operating margin | 1.4% | 4.1% | −2.7 points |
| Capital expenditure | $5.79 billion | $2.39 billion | +142% |
| Capex as percentage of revenue | 20.5% | 10.6% | +9.9 points |
| Free cash flow | −$1.09 billion | $0.15 billion | −$1.24 billion |
The data is sourced from Tesla’s unaudited quarterly report. Capex-to-revenue ratios are derived from the disclosed numbers.
Capital expenditures accounted for approximately 20% of sales during the quarter, up from nearly 10% the previous year. Operating cash flow increased by 85%, yet capital outlays grew at an even higher rate.
Volume stayed robust. Deliveries rose 25% to 480,126 and revenue totaled $28.24 billion. However, adjusted earnings per share were 33 cents, missing the LSEG estimate of 51 cents. Automotive gross margin came in at 16.3%, falling short of Visible Alpha’s forecast of 18.04%.
Higher sales did not offset the impact of reduced prices. The average revenue earned per vehicle delivered slipped to $42,730 from $45,345. Income from regulatory credits declined 67% to $146 million. Spending on research increased 49%, reaching $2.37 billion.
Elon Musk, the Chief Executive, described 2026 as “a massive capex year.” Ryan Lee, senior vice president at Direxion, stated: “Monetization remains the central concern following the earnings miss.” Reuters
Robotaxi statistics highlight the issue. Tesla disclosed 2.5 million paid passenger miles, with 380,000 of those occurring without an in-car monitor. Alphabet’s NASDAQ:GOOGL Waymo surpassed 220 million autonomous miles completed as of March. These figures represent varying timeframes and use separate criteria.
Tesla posted further positive figures. Subscriptions for active FSD Supervised grew 56% to reach 1.48 million. Storage deployments were up 41%, totaling 13.5 gigawatt-hours. Services and other revenue advanced by 50%.
These businesses provide paths to higher-margin, recurring revenue streams. The operating margin for the second quarter indicated that the transition continues to incur significant costs.
The Federal Reserve is set to convene on Tuesday and Wednesday. Preliminary GDP figures for the second quarter and inflation data for June are due Thursday. Tesla has cautioned that rising rates may make vehicle financing less affordable.
Risks: Accelerated uptake of FSD, increased rollout of robotaxi services or higher service demand may boost cash flow earlier. On the other hand, setbacks, softer vehicle pricing or elevated borrowing expenses might prolong periods of negative cash flow.
Tesla begins Monday with more than demand in focus. Investors are looking for proof that heavy investment will translate autonomous technology into profit.
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