Tesla stock drop wipes out nearly $200 billion after Musk spending plan
Tesla shares fell more than 13% after earnings, as analysts questioned capex, robotaxi timing and Optimus progress.
By Frankie Delgado · News Reporter
3 min read
Tesla stock drop pressure hit hard Thursday, with shares down more than 13% shortly after the open after investors balked at Elon Musk’s push to spend heavily on artificial intelligence, robotaxis and humanoid robots.
The move erased roughly $195 billion from Tesla’s market value so far Thursday, according to Dow Jones Market Data cited by MarketWatch. That loss was larger than the current market capitalization of any other global automaker, according to the same data.
Tesla had delivered one of its strongest quarters for electric-vehicle sales, MarketWatch reported, but Wall Street’s focus quickly shifted to how much money the company plans to pour into projects that have not yet produced clear returns.
Why is Tesla stock dropping?
Analysts pointed to three pressure points: Tesla’s planned capital spending, weaker-than-expected second-quarter earnings and limited clarity on when its AI projects will pay off. Morningstar analyst Seth Goldstein attributed the selloff to capex plans and the quarterly results, according to MarketWatch.
Oppenheimer analyst Colin Rusch said in a client note that updates on Optimus and robotaxis were subdued given the technical hurdles ahead, even as EV sales looked strong. He also called the results “uninspiring” and lowered his profit expectations, citing execution risks and Tesla’s need for capital.
Musk told investors Wednesday that Tesla should be spending on capital expenditures “as fast as we can” while avoiding too much waste. He added that being a little less efficient with capital was acceptable if it helped the company finish projects sooner.
Tesla reiterated that it expects at least $25 billion in capital expenditures this year, with most of that spending set for the second half of 2026. The company also said capex should keep rising over the next few years.
Morgan Stanley’s Andrew Percoco said investors still need more clarity on when Tesla will start seeing returns from those investments. He lowered his price target to $400 from $417, while MarketWatch reported Tesla was trading near $323.
Percoco now expects Tesla to spend nearly $30 billion on capex in 2027, up from his previous $20 billion estimate, and projects $14 billion of cash burn that year. FactSet consensus cited by MarketWatch expects Tesla to burn $9 billion in 2026.
What did Tesla say about robotaxis and Optimus?
Tesla said its robotaxi network has been scaling for about 13 months and recently entered several new markets. The company offers ride-hailing in seven cities, and all but one include some unsupervised trips, according to MarketWatch.
Tesla also said it has logged more than 380,000 miles of unsupervised robotaxi trips. Ashok Elluswamy, Tesla’s head of artificial intelligence, said the company has grown unsupervised miles per week at double-digit rates since the start of 2026.
Gary Black, managing partner at the Future Fund and a former Tesla investor, said on X that those metrics were “largely irrelevant” and argued Tesla had not reduced uncertainty around its scale-up, which he said was hurting the stock.
On Optimus, Musk described a difficult five-year effort and pointed to the absence of a ready supply chain for humanoid robots. He also described the challenge of building a robotic hand that can work like a human hand.
Musk said the robot is meant to enter production “soon,” though in limited numbers at first. Tesla management did not give a date for unveiling the third version of Optimus, which MarketWatch reported had initially been expected earlier this year.
To help fund its plans, Tesla said it is securing debt facilities that could let it borrow up to $30 billion. The company had $43.5 billion in cash, cash equivalents and short-term investments at the end of June.
This story draws on original reporting from MarketWatch.