Elon Musk says Tesla expenses will rise substantially in the future as he funds AI and robotic dreams

Tesla CEO Elon Musk said he expected the electric vehicle maker’s capital expenses would rise “substantially in the future” after it surprised investors on Wednesday with positive cash flow in the first quarter.“We’re going to be substantially increasing our investments in the future, so you should expect to see significant increase in capital expenditures,” Musk told analysts on a conference call.He said the spending was “well justified for a substantially increased future revenue stream,” noting big capex plans at top tech companies.Tesla CFO Vaibhav Taneja boosted the company’s capital expenses forecast to $25 billion this year, from $9 billion in 2025.

In January, the company said it would spend more than $20 billion in 2026.Tesla is in the middle of one of the most expensive bets in its history.Musk pivoted the electric vehicle maker’s focus to building artificial-intelligence-powered self-driving cabs and humanoid robots, and much of Tesla’s $1.45 trillion market cap rests on that vision.The company will have negative free cash flow for the rest of 2026, Taneja said.

In the first quarter, it recorded positive free cash flow of $1.44 billion, compared with estimates for a cash burn of $1.43 billion, according to data compiled by LSEG.“We are in a very big capital investment phase, which is going to start now and would last a couple of years,” he said.The company’s shares, which had risen as much as 4% after it reported first-quarter results after the bell, gave up nearly all gains after the executives’ remarks on the call.First-quarter profit topped Wall Street targets in a sign that the electric vehicle maker was holding the line on costs in a difficult global environment. Tesla’s capital expenditures in the quarter were about 40% below what analysts on average were expecting.The Austin, Texas-based automaker reported revenue of $22.39 billion for the three months ended March 31, compared with analysts’ average est...