Tesla said its full-year capex would come down to $20 billion from $25 billion, as it will fund this spending from operating cash flows.
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Tesla (TSLA) reported better-than-expected third quarter earnings, with its free cash flow and capex spending coming in ahead of Wall Street estimates.
Tesla reported Q3 revenue of $28.05 billion vs. Bloomberg consensus of $28.13 billion. Tesla posted adjusted EPS of $0.48 vs. the $0.44 estimate, with adjusted EBITDA of $3.90 billion vs. $3.66 billion.
Tesla stock was volatile in after-hours trading.
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Tesla reported free cash flow of $1.53 billion vs. an estimated -$4.92 billion, with capital expenditures climbing to $4.732 billion vs. an estimated $7.96 billion for the quarter.
On the earnings call, Tesla updated its full-year capex guidance to $20 billion from $25 billion previously. Tesla CFO Vaibhav Taneja said the savings would come from “managing our capital deployment efficiently, and plan to fund [capex] primarily from our cash flows from operations,” he said.
“I think capex is actually ending up being a little lower than we anticipated, but we’ll start to become more meaningful next year. And then noticeable in the tens of billions in ’28,” CEO Elon Musk said on the call.
The money is going to Optimus production lines, AI compute, the Cybercab ramp, and the Terafab chip plant Tesla is building with SpaceX.
Tesla revealed its Optimus robot started production at its Fremont factory. “While we will continue to iterate on the hardware and manufacturing process, we have proven that the current manufacturing process for Optimus is suitable for a commercial product,” the company said in its earnings release.
“I would expect that it takes us probably at least a year — maybe a little longer — to get to that annualized rate [1 million units], to get to 20,000 units a week,” Musk said on the earnings call. Musk added that Tesla may release an Optimus demo video in about a month, stressing that he didn’t want the robot’s movements to be preplanned.
Regarding its other AI efforts, Tesla said it plans to reach 400 MW of AI training compute by the end of the year. Tesla said its active FSD (full self-driving) subscriptions climbed to 1.74 million.
“The biggest driver of demand is full self-driving,” Musk said regarding vehicle sales.
“The Cybercab fleet in Austin has grown by a factor of 10,” Musk added while discussing Tesla’s robotaxi fleet. He added, “I don’t think there’s any company in the world that can match our scale with autonomous vehicles.”
Musk also stirred the pot recently with comments about a possible tie-up with SpaceX, his other company.
“I think both SpaceX and Tesla have formed special committees to discuss this idea,” Musk said during SpaceX’s earnings call Tuesday night. “At the request of shareholders, and these special committees consist of independent directors. And because I’m a conflicted party, I can’t actually be in the discussions of the special committees.”
