Tesla’s cash burn will test investor faith in its AI bets

Tesla reported record vehicle deliveries in Q2 but is expected to have negative free cash flow of about $3.25 billion due to heavy spending on AI projects including Dojo, Cybercab, and Optimus robot. The company has increased its 2026 capital budget to over $25 billion, focusing on AI and robotics, while autonomy revenue remains small and future cash flow positive contributions are not expected until 2027 or later.