Despite unexpectedly delivering positive free cash flow in the first quarter of this year, Tesla CEO Elon Musk still anticipates a significant increase in Tesla’s future capital expenditures.
According to a Reuters report, Musk mentioned in an analyst conference call that Tesla will significantly increase its investment, and capital expenditures will also increase significantly. “Given the potential for substantial future revenue growth, such investment is entirely reasonable.”
Musk also compared Tesla’s move to that of several other leading tech companies that have significantly expanded their capital expenditures, aiming to demonstrate that Tesla’s actions are not isolated.
Tesla’s Chief Financial Officer, Vaybaf Tanedja, raised the company’s capital expenditure forecast for this year to $25 billion (approximately RMB 170.909 billion at the current exchange rate), up from $9 billion in 2025. In January of this year, Tesla had projected that capital expenditures in 2026 would exceed $20 billion (approximately RMB 136.728 billion at the current exchange rate) .
Tesla is currently making one of the most costly gambles in the company’s history. Musk has shifted Tesla’s focus to AI-powered self-driving taxis and humanoid robots, and a significant portion of Tesla’s $1.45 trillion (approximately RMB 9.91 trillion) market capitalization is betting on this vision.
Taneja also predicted that Tesla’s free cash flow would remain negative for the remainder of 2026. According to data compiled by the London Stock Exchange Group, Tesla recorded $1.44 billion in positive free cash flow in the first quarter, while the market had generally expected Tesla to burn through $1.43 billion in cash. “Tesla is entering a very large capital investment phase, which will begin now and last for several years.”
Tesla’s stock price rose as much as 4% in after-hours trading after the company released its first-quarter earnings report, but almost all of the gains were given back as executives discussed further expansion of capital expenditures in a conference call.
In terms of performance, Tesla’s first-quarter profit exceeded Wall Street expectations, indicating that despite the still challenging global environment, Tesla maintained cost control. Tesla’s capital expenditures for the quarter were also about 40% lower than the average analyst forecast.
According to data from the London Stock Exchange Group, Tesla generated $22.39 billion in revenue (approximately RMB 153.066 billion at the current exchange rate) in the three months ending March 31, slightly below the average analyst estimate of $22.6 billion.
Although Tesla’s first-quarter deliveries fell short of Wall Street expectations, they still increased by 6.3% year-over-year.
In its statement, Tesla noted continued growth in vehicle demand in the Asia-Pacific and South American markets, while demand in Europe, the Middle East and Africa, and North America is also recovering. However, its core automotive business remains under considerable pressure. On one hand, competitors are constantly launching newer models, often at lower prices. On the other hand, the expiration of the U.S. electric vehicle tax credit has further squeezed market share.
Reuters previously exclusively reported that Tesla is developing a new, smaller, and lower-priced all-electric SUV, planning to first produce it in China, and then potentially expand to the United States and Europe. However, the project is still in the early stages of development and is not expected to go into production in the short term.
According to data from Visible Alpha, Wall Street currently expects Tesla to deliver 1.67 million vehicles in 2026, representing a year-on-year increase of 2.4%.
In contrast, Tesla’s power generation and energy storage business has become one of the few notable bright spots. Demand for grid-scale energy storage batteries remains strong; these products support renewable energy and contribute to grid stability.
Today, investors are increasingly focusing on Musk’s self-driving and robotics ventures. The market wants to see clearer evidence that the self-driving narrative is moving from concept to real-world commercialization.
