Tesla Shares Fall 3% After Cutting Capital Spending

Tesla reported flat revenue while surprising analysts by reporting free cash flow for its third quarter.

On Wednesday, the company said its revenue for the period was $28 billion, unchanged from a year earlier. Instead of burning $4.92 billion in cash for the quarter, as analysts had forecast, Tesla instead reported $1.53 billion in positive free cash flow. It was a sign that the company was spent less than expected on AI, robotaxis, the humanoid robot Optimus and other capital-intensive projects.

While Tesla’s more cautious approach to spending could strengthen it financially in the near term, it could also jeopardize the company’s long term growth from new initiatives. Tesla shares fell more than 3% in afterhours trading.

Speaking to analysts, Musk said he wouldn’t discuss a potential merger of SpaceX and Tesla after speaking about it at length the previous evening during SpaceX’s earnings call.

One of the highlights from the quarter was Tesla’s disclosures of how many new Tesla owners are signing up for $99 per month paid subscriptions to the company’s autonomous driving platform, which it calls Full Self Driving. Tesla reported that 75% of buyers are taking the subscription, a surge from 55% the prior quarter.