Tesla increased its 2026 capital expenditure forecast to approximately $25 billion. This planned spending represents a threefold increase over the company's historical annual average. The investment funds artificial intelligence, the Optimus robotics project, and Austin-based chip fabrication.
Tesla expects this aggressive spending to generate negative free cash flow for the remainder of the year. This financial outlook reversed an initial first-quarter free cash flow beat. Tesla shares erased post-earnings gains in after-hours trading as investors assessed the costs.
CEO Elon Musk stated the investment secures future revenue by controlling the AI silicon supply chain. A 10-Q filing disclosed an April 2026 agreement to acquire an unnamed AI hardware firm. Tesla will pay up to $2 billion in stock and equity awards for the purchase. The acquisition includes performance milestones for the company's unscaled technology.