Tesla shares fall after spending cut raises questions about AI and robotics plans

Tesla shares dropped about 2% during trading on October 22 after the company reduced its annual investment budget. The decline reflected concerns about how quickly Elon Musk's plans for artificial intelligence, autonomous vehicles and robots would advance. Tesla now expects roughly $20 billion in capital expenditures for 2026, compared with its earlier forecast exceeding $25 billion.

Tesla's quarterly results showed capital expenditures of $4.73 billion, down from $5.79 billion in the preceding quarter. It generated $1.53 billion in free cash flow, reversing a $1.09 billion deficit in the second quarter. Revenue totaled $28.05 billion, while net income attributable to common shareholders was $787 million.

The investment revision comes as Tesla expands businesses beyond passenger vehicle sales. Tesla said Cybercabs joined its Austin robotaxi service in September and Optimus robot production began on manufacturing lines in Fremont, California. Those projects sit alongside investments in computing infrastructure and battery manufacturing.

Tesla said it plans to reach 400 megawatts of AI training computing capacity by year-end to support software development for vehicles and humanoid robots. It also expects to begin commissioning equipment at its Austin semiconductor facility in 2027. These remain company targets.