Tesla Q2 Free Cash Flow Projected Negative $3.3B; Full-Year Capex Reaches $25B

According to LSEG data, Tesla's Q2 free cash flow is expected to turn negative by $3.3 billion for the first time in over two years, as the company's capital expenditures surge to $25 billion annually for AI infrastructure, data centers, and manufacturing capacity. The electric vehicle manufacturer is scheduled to report second-quarter results on July 22.

While Tesla's Q2 vehicle deliveries rebounded to a four-month high, well above market expectations, Morgan Stanley and Barclays analysts noted the rebound may prove insufficient to offset heavy spending. Excluding regulatory credit income, Wall Street forecasts Tesla's automotive gross margin at 18.1% for Q2, down from 19.2% in Q1, according to Visible Alpha data.