Tesla beats forecasts with $1.53B free cash flow, cuts 2026 spending by 20%

Tesla reported $1.53 billion in free cash flow for the third quarter, beating market expectations, while cutting its 2026 capital expenditure forecast by one-fifth to about $20 billion. The lower-than-expected spending of $4.7 billion, versus the $7.5 billion analysts predicted, drove the cash surplus despite a 43% drop in net income and flat revenue. Tesla delivered 486,532 vehicles, with demand boosted by higher petrol prices. The reduced capex raises questions about Tesla's investment in AI, robotics, and autonomous driving, especially as CEO Elon Musk explores a potential merger with SpaceX. Shares initially rose 2% before falling 2% in after-hours trading.