Tesla surprised Wall Street by spending less, not more. Tesla's third-quarter capital expenditure of $4.7 billion was more than double a year earlier but below the $7.5 billion analysts expected on average, Reuters reported on Wednesday, Oct. 21, 2026, citing LSEG data. Free cash flow came in at $1.53 billion, against an expected cash burn of $4.92 billion.
How the stock reacted
TSLA closed the regular session at $386.47, up 3.41% from $373.71, according to Investing.com. After the report, Reuters said shares were down 1.8% in after-hours trading, Investing.com put the after-hours price at $377.88 (down 2.22%), and CNBC said the stock slid more than 3% in extended trading. The figures were taken at different times in the evening session.
Why analysts are split
- "Lower capex suggests less of an 'all-in' approach to the AI arms race than one would expect from Elon," Ryan Lee of Direxion told Reuters.
- "Tesla's surprisingly positive cash flow quarter did not come from stronger profits, but from spending billions less than planned," said Thomas Monteiro of Investing.com, per Reuters.
- Automotive gross margin excluding regulatory credits was 18.1%, above the 16.7% analysts expected (Visible Alpha via Reuters) and up from 16.3% in Q2, CFO Vaibhav Taneja said on the call.
- Energy gross margin jumped to 33.1% from 20.4%, which Taneja attributed mainly to tariff refunds and warranty true-downs tied to cell costs a vendor will reimburse.
- Net income included a $142 million mark-to-market loss on Tesla's SpaceX holding and a Bitcoin mark-to-market gain of about $290 million, Taneja said.
Taneja also said Tesla secured capacity to borrow up to $30 billion during the quarter but does not plan to draw on it this calendar year. Related: Tesla's full Q3 2026 results and Tesla's cut to its 2026 capex guidance.
