Tesla warns 2026 capex above $25B, stock slides 7% as Cybercab production starts
Tesla beat Q1 revenue and EPS estimates but warned 2026 capex will exceed $25 billion, driving negative free cash flow all year. Shares fell about 7% this week as investors digest increased AI and robotics spending alongside the start of slow Cybercab robotaxi production at Giga Texas.
1. Q1 Earnings Beat and Capex Warning
Tesla beat top and bottom line estimates for Q1, but CFO Vaibhav Taneja guided 2026 capital expenditures toward over $25 billion, forecasting negative free cash flow through year-end.
2. Investor Reaction and Stock Movement
The capex outlook triggered a roughly 7% weekly decline in Tesla shares, reversing prior rally gains as market concerns over heightened AI and robotics spending intensified.
3. Cybercab Production Launch at Giga Texas
Initial production of the two-seat, steering-free Cybercab robotaxi began this month at Giga Texas, with CEO Elon Musk warning that volumes will follow a stretched S-curve and remain low before ramping later in the year.
4. Regulatory Compliance and Ramp Expectations
Tesla designed Cybercab to meet all federal safety standards, allowing self-certification and bypassing the 2,500-unit exemption cap, while projecting material revenue from the robotaxi only starting in 2027.