Tesla hikes 2026 capex to $25B, betting big on AI and robotics

Tesla CEO Elon Musk announced on the company's first-quarter earnings call that capital expenditures will surge to $25 billion in 2026, tripling previous annual spending as Tesla pivots from an electric vehicle maker to an AI and robotics company. The figure is $5 billion higher than the $20 billion forecast in January, reflecting expanded investments in compute infrastructure, data centers, manufacturing, and R&D. In Q1 2026, Tesla spent $2.5 billion on capex, consistent with prior quarters. CFO Vaibhav Taneja warned that free cash flow will turn negative for the rest of the year, despite a $1.4 billion positive surprise in Q1. Tesla ended the quarter with $44.7 billion in cash and short-term investments. Specific capex allocations include AI training, chip design, robotaxi operations, a new semiconductor research fab in Austin, and the ramp-up of Optimus humanoid robot production. The Fremont factory will cease Model S and Model X production to make room for Optimus assembly. Ground has been cleared near the Austin factory for a dedicated Optimus facility. Musk expects Optimus to be "useful outside of Tesla sometime next year." The company is also strengthening its supply chain across batteries, energy, and AI silicon. Musk noted that rivals Amazon and Google are also boosting capex, with Amazon projecting $200 billion in 2026 and Google between $175 billion and $185 billion. Tesla shares erased after-hours gains as the plan was detailed.