Tesla Reports First Quarterly Cash Burn in Two Years

Tesla reported a negative free cash flow of $1.1 billion for the second quarter ending June 30, marking the company's first quarterly cash burn in over two years. The company missed profit forecasts, posting an adjusted profit of 33 cents per share against an expected 51 cents. This financial strain is driven by a strategic pivot by Elon Musk toward physical AI ventures, including the Optimus humanoid robot and a robotaxi network, with total AI infrastructure spending projected to exceed $25 billion this year.

Despite the cash burn, Tesla delivered 480,126 vehicles in the April-to-June period, a 25% year-over-year increase that surpassed Wall Street expectations. Growth was bolstered by high oil prices in Europe and the full production ramp of the new Model Y. However, U.S. sales declined by approximately 20% following the expiration of federal EV tax credits, prompting Tesla to introduce lower-priced trims and a six-seater Model Y to remain competitive.

Investors have expressed concern over the slow deployment of autonomous technology. While Musk previously predicted robotaxis would serve half the U.S. population by late 2025, the service remains limited to Texas and Florida. Regarding the steering-wheel-less Cybercab, Musk cautioned that the production ramp would be "agonizingly slow."