- Tesla expected to report first quarterly cash burn in over two years due to AI spending
- Elon Musk shifted focus from cars to AI products like humanoid robots and robotaxis
- AI infrastructure investment may reach $25 billion this year, exceeding core automotive cash
Tesla is expected to report its first quarterly cash burn in more than two years on Wednesday, as investor scrutiny of whether those bets will pay off increases amid the company's skyrocketing spending on robotics and artificial intelligence.
Elon Musk, the CEO of the electric vehicle manufacturer, has shifted the company's emphasis from producing automobiles to creating "physical AI" products such as humanoid robots and self-driving taxis. That potential is a major factor in Tesla's price, as reported by Reuters.
However, since investment in AI infrastructure—including data centres and manufacturing capacity—is expected to reach $25 billion this year, surpassing the quarterly cash earned by Tesla's core automotive and energy activities, investors are becoming more and more anxious.
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"As capex more than doubles and free cash flow turns negative, investors are increasingly focused on evidence that Tesla's spending is strengthening its physical AI moat," Morgan Stanley analysts wrote in a report.
Investors have been placing bets that Tesla's aspirations for robotics and autonomous driving technology may eventually open up new, high-margin revenue streams. However, Musk has missed some of his own deadlines, and progress has been slower than many observers anticipated.
Musk projected that by the end of 2025, half of the American population would be served by Tesla robotaxis, shortly after the company launched its robotaxi service in Austin, Texas, in April of last year. Tesla announced in January that the service would launch in seven more cities during the first half of 2026. However, its robotaxi network is still limited to Miami, Florida, Austin, Dallas, and Houston, Texas.
"What is keeping Tesla back from accomplishing these short-term goals that they've set for themselves?" was the most popular question submitted by a retail investor on Tesla's investor relations website before Wednesday's earnings call.
Tesla's AI-driven bets, including robotaxis, Optimus humanoid robots, and its Full Self-Driving technology, account for nine of the top 10 most popular queries.
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"Why has robotaxi vehicle growth stagnated? Another retail investor questioned, "When will we see Cybercab start customer rides?"
According to Tesla, it has begun producing the Cybercab, a custom robotaxi without a steering wheel or pedals. The cars haven't been integrated into a robotaxi network, either, as Musk stated that the production ramp would be "agonisingly slow."
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