Tesla announced an increase in capital expenditures up to $25 billion. Quotes went negative

Shares of Tesla turned around and went negative in extended trading on April 22, having lost all growth after the publication of the quarterly report. At the moment quotes were falling by more than 2%. The pressure on the securities was exerted by statements of top management about a sharp increase in capital expenditures during a conference call with investors and analysts, Bloomberg writes.

The head of the company Elon Musk announced a "very significant" increase in costs. The CFO specified that in 2026 Tesla plans to spend more than $25 billion instead of the previously announced benchmark of $20 billion. For comparison: in 2025 its capex amounted to about $8.5 billion, and in 2024 - about $11 billion, recalls Bloomberg. The agency called the announced level of investments huge and reminded that the company's expenses have been a serious cause for concern for Wall Street before.

At the same time, the growth of shares after the report was largely due to the fact that capital expenditures in the last quarter were significantly lower than expected, Bloomberg writes. The company spent less than $2.5 billion during the quarter and managed to achieve a positive free cash flow of $1.44 billion.

Deke Mullarkey, managing director of SLC Management, said the updated forecasts are "sobering" for assessing free cash flow potential. "Investors were initially encouraged by the strong operating results, but the price of that growth has also increased and the market is now rethinking that," he said.

"A higher capex benchmark pushes the return to a later date," warned Karobaar Capital investment director Haris Khurshid, "Investors like the story itself, but they revise expectations every time they realize how much more [the company] has to realize.

Additional pressure on Tesla shares could be exerted by comments on projects that some analysts called key drivers for the company's securities. Musk said that the robotaxi business will not generate significant revenue until at least next year. And he also said that the presentation of the Optimus 3 humanoid robots has been postponed to late July-August, closer to the production launch date, emphasizing that at the first stage the production of robots will be "quite slow" because it is a completely new product and production line.

This article was AI-translated and verified by a human editor