Key Highlights

  • Tesla (NASDAQ: TSLA) fell 3.2% in premarket trading, and as much as 5% by another measure, despite beating estimates.
  • Full-year capex guidance was cut to about $20 billion from more than $25 billion.
  • Tesla secured capacity to borrow up to $30 billion but does not plan to draw on it this calendar year.
  • Musk said both Tesla and SpaceX have formed special committees to study a merger, which would need 50% of all Tesla shares.

Tesla Inc. (NASDAQ: TSLA) fell in premarket trading on Thursday, down 3.2% in some tallies and as much as 5% to $367.20 in others, even after the electric-vehicle maker beat third-quarter estimates, as investors focused on a cut to its spending plans.

The company topped analyst forecasts on earnings and revenue, according to multiple reports, but the shares had slipped in extended trading on Wednesday as the earnings call progressed.

The Capex Cut

Chief Financial Officer Vaibhav Taneja said Tesla is revising full-year capital expenditure to about $20 billion, down from more than $25 billion, which he attributed to managing capital deployment efficiently. Free cash flow and capex both came in better than Wall Street had expected.

That might sound like good news, but investors read it differently. Gene Munster of Deepwater Asset Management said the stock fell because the cut left investors wanting more spending, not less, since capital expenditure is the hard metric the market uses to gauge how fast Optimus and Cybercab are being built. Dave Mazza of Roundhill said the lower figure suggests Tesla is not moving fast enough toward becoming an AI-focused company. Morningstar’s Seth Goldstein pointed to capacity constraints in autos and batteries that could slow near-term growth.

Spending is expected to rise again. Tesla said capex would be heavier in 2027 and 2028 as it scales the robotaxi fleet, Optimus production, solar manufacturing, compute infrastructure and a semiconductor fab, known as Terafab.

Financing and the Optimus Timeline

Tesla said it secured capacity to borrow up to $30 billion to support expected growth in capex, but does not plan to make any draws under the new facilities in this calendar year. Elon Musk tempered the timeline for scaling the Optimus robot, which also weighed on the shares.

The SpaceX Merger Question

The earnings come two days after Musk told investors on SpaceX’s third-quarter call that Tesla and SpaceX have each formed special committees of independent directors to discuss a possible merger, at the request of shareholders. He said he cannot take part because he is a conflicted party, that assuming a merger is a certainty would be overstating it, and that the committees have not agreed terms.

“Do I think it would be a good idea? Yes,” Musk said. On the Tesla side, he said any deal would need the vote of 50% of all outstanding shares, not just those that vote, which he called quite a high hurdle. SpaceX shares rose in extended trading after that call, according to reports, and the company posted third-quarter revenue of $14.6 billion, above the $12.87 billion consensus.

Musk owns about 20% of Tesla, compared with about 48% of SpaceX, where super-voting shares give him around 82% of the vote, Yahoo Finance reported. SpaceX is worth about $2.1 trillion and Tesla about $1.5 trillion.

A Weak Tape

The broader market was down. S&P 500 futures fell 0.9% and Nasdaq 100 futures 1.6% as oil climbed and AI-related shares sold off. Tesla’s drop contrasted with Meta, which raised its spending and was received more warmly.

What to Watch

Investors will watch for news from the two special committees, any update on Optimus and Cybercab milestones, and whether Tesla begins to draw on its new borrowing facilities in 2027. Tesla’s valuation, at several hundred times trailing earnings by some measures, leaves little room for slower-than-promised progress.

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