Shares of Tesla dropped 4% in pre-market trade on Thursday, October 22, as investor sentiment weakened after the electric vehicle maker cut its capital expenditure forecast, clouding Elon Musk’s plan to transform the company into an AI and robotics business.
Capital expenditure will be around $20 billion this year, the company said on Wednesday after reporting its earnings. This marked a reversal from earlier this year, when Tesla raised its target to more than $25 billion.
The reduction eases the immediate funding requirement but also raises questions about investment timing. Tesla did not specify which projects would account for the reduction.
Tesla had consistently fallen short of the pace needed to meet its spending target, particularly after reporting a $4.73 billion outlay in the third quarter. Analysts had expected capital expenditure of $7.95 billion on average, according to estimates compiled by Bloomberg.
During the company’s earnings call on Wednesday, Chief Financial Officer Vaibhav Taneja said capital expenditure would continue to grow as Tesla invests in its robotaxi fleet and expands production of the humanoid robot Optimus and solar products.