Lower spending explains about 43% of that surprise on Reuters’ figures. Operating cash flow covered the rest, helped by a $2.59 billion inflow from working capital.
Lower Capex Covers 43% to 50% of Tesla’s Beat
Tesla spent $4.73 billion on capex, double the $2.25 billion of a year earlier but down from $5.79 billion in the second quarter. Analysts expected about $7.5 billion, per LSEG data cited by Reuters, a $2.77 billion shortfall. Against the $6.45 billion gap between expected and actual free cash flow, that’s 43%. Estimate sets that put capex near $7.96 billion lift the share to 50%.
The rest came from operating cash flow of $6.26 billion, flat with a year ago. Working capital supplied $2.59 billion of it, led by a $3.99 billion jump in payables and accrued liabilities and $1.26 billion of deferred revenue. Excluding those changes, free cash flow was about negative $1.06 billion, against negative $2.50 billion on the same basis in the second quarter.
That inflow can reverse when those bills come due. (Q3 2025 also got $2.08 billion from working capital, so part of this is seasonal.)
Tesla Cuts 2026 Spending but Expects More Ahead
Tesla spent $13.01 billion in the first nine months. A $20 billion year leaves about $6.99 billion for the fourth quarter, against roughly $11.99 billion under the old guide. Even the lower figure would top any quarter since at least 2023.
Taneja said capex “for the next few years would continue to expand.” Asked about chipmaking equipment, Musk put Terafab’s needs through early 2028 in the tens of billions, with Tesla’s split with SpaceX undecided.
The expensive milestones are still ahead. Tesla runs over 225 megawatts of training compute against a 400 megawatt year-end target. Musk said Optimus needs “at least a year, maybe a little longer” to reach 20,000 units a week, and the research fab’s first test chip is due around May or June 2027.
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Tesla’s 2026 Burn Estimate Needs a Quarter Tesla Hasn’t Had
Analysts still model 2026 free cash flow at negative $10.24 billion, deeper than the roughly negative $8.5 billion consensus in May. Tesla is at positive $1.88 billion through September, so that estimate needs a $12.12 billion fourth-quarter burn. With about $6.99 billion of capex, operating cash flow would have to come in near negative $5.14 billion. Tesla’s weakest operating cash flow since 2023 was positive $242 million, in the first quarter of 2024.
The 2027 estimate of negative $9.35 billion is the one to watch. Management expects capex to keep rising, but hasn’t said how much of the 2026 reduction moves into next year. Shares turned lower during the call, after the guidance cut.
Good Quarter or Good Timing for Tesla?
The bull case: Tesla ended September with $45.45 billion in cash and investments, plans to fund this year’s capex mainly from operating cash flow, and hasn’t drawn on $30 billion of new borrowing capacity.
The bear case: $2.59 billion of the quarter’s operating cash flow came from working capital, and management expects capex to keep rising for the next few years.
To me, this was a quarter of good timing more than a reset of Tesla’s cash needs. Fourth-quarter results in January are the test: capex near $7 billion would match the new guide and set a quarterly high since at least 2023, and the working-capital lines will show whether the third quarter’s support holds or reverses.
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Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
