Tesla to log $3.3bn Q2 cash burn as AI spend tests investor patience

Tesla’s Q2 results pit record deliveries against a $3.3 billion cash drain

On 22 July the company will file its second‑quarter earnings. The shift comes as Tesla’s capital budget for 2026 jumps to more than $25 billion – up from around $20 billion three months earlier – with close to $20 billion earmarked for AI, spanning Dojo compute, a data-centre buildout, the Cybercab, and the Optimus robot, according to The Next Web.

Deliveries in the April‑June window hit a new high of 480,126 vehicles, a rise of roughly 25 percent from a year earlier and well above the roughly 406,000 analysts had modelled. The surge was driven by the low‑priced Model 3 and Model Y, which together accounted for about 97 percent of total hand‑overs, as noted by The Next Web.

Despite the volume, analysts expect free cash flow to slip into negative territory by $3.3 billion – a figure quoted by Reuters in an Aol story that cited LSEG data. The same report projects earnings of 50 cents per share, up from 40 cents in the comparable period a year earlier.

"As capex more than doubles and free cash flow turns negative, investors are increasingly focused on evidence that Tesla's spending is strengthening its physical AI moat,"

Analysts, Morgan Stanley, via Reuters

Tesla’s chief financial officer disclosed in April that Tesla would run negative free cash flow for the rest of 2026. The projected loss for the quarter would reverse a positive $1.4 billion recorded in the first quarter, as outlined by The Next Web.

AI and robotics spending

Robotaxi growth remains limited. The robotaxi network remains confined to Austin, Dallas, Houston in Texas, and Miami in Florida.

"Why has growth of robotaxi vehicles stalled? When will we see Cybercab start customer rides?"

Retail investor, via Tesla investor‑relations site

Tesla has said that it has started manufacturing its Cybercab vehicle, a tailor-made robotaxi without a steering wheel and pedals. However, the vehicles have not been deployed into a robotaxi network, with Musk saying that the production ramp would be "agonizingly slow."

Optimus, billed as the company’s largest future product, is still in the early stages of ramp‑up and currently contributes no cash flow. The Next Web points out that the robotaxi business “remains a fraction of Waymo’s” and that “meaningful revenue not expected before 2027 at the earliest.”

Analyst split on the AI gamble

Morgan Stanley’s Andrew Percoco called robotaxi scaling the “most important catalyst” for the stock, maintaining a neutral rating while raising his price target to $417, and UBS’s Joseph Spak has kept a similarly cautious hold, as reported by The Next Web.

Barclays analysts, quoted by Reuters, said that a stronger automotive segment would help generate the cash needed to finance AI bets. Deutsche Bank warned that the elimination of upfront Full Self‑Driving software purchases earlier this year and low interest‑rate financing in May could affect profitability.

Consensus points to revenue near $27.6 billion, a gross margin around 19.5 percent, and adjusted earnings of about $0.55 per share. Visible Alpha data, referenced by Reuters, suggest automotive gross margin excluding regulatory credits of 18.1 percent, down from 19.2 percent in the prior three‑month period.

Cash reserves and energy business

Tesla still holds more than $40 billion in cash, providing a buffer for the planned AI spend, according to The Next Web. Energy storage saw a rise to 13.5 GWh deployed in the quarter, up from 9.6 GWh a year earlier, but the segment is not yet large enough to offset the autonomy burden.

What to watch after the earnings call

The earnings call is scheduled for 5.30 pm ET on 22 July, with the results released after the market close. Options pricing implies that the stock could move roughly 7 percent either way following the announcement.