Tesla posts surprise positive cash flow after AI spending falls short of forecasts

Tesla reported surprise positive free cash flow of $1.53 billion for the third quarter on Wednesday, far exceeding analyst expectations of a $4.92 billion cash burn, after spending less on AI and robotics than Wall Street projected. Capital expenditure totaled $4.7 billion, more than double last year but well below the $7.5 billion analysts expected, raising questions about Tesla's commitment to the AI arms race. The company also beat revenue estimates at $28.05 billion, with deliveries rising and automotive gross margins hitting 18.1%. The unexpected cash flow could strengthen Tesla's case in a potential merger with SpaceX, which CEO Elon Musk called a "good idea." However, analysts note the positive result came from spending less, not stronger profits, as Tesla's growth story depends heavily on AI, robotaxis, and humanoid robots.