Elon Musk Pushes Tesla to Spend Faster on AI as Capex Surges

Elon Musk told investors Tesla should keep accelerating capital spending on AI, saying the company should spend “as fast as we can” without being too wasteful. His point: aiming for extremely high-efficiency capital spending could slow Tesla down at a moment when the company is trying to scale major AI-linked programs.

The framing gives investors a clear signal that Tesla is prioritizing speed, infrastructure, and production capacity over near-term spending restraint.

Tesla’s capital expenditure rose 142% year over year to $5.8 billion in the second quarter, according to the article. The spending push includes new production lines and factories for the Cybercab robotaxi and Optimus humanoid robot.

Executives also said AI spending will continue to grow, with total capex expected to surpass $25 billion this year. For readers tracking Tesla, the key metric is whether these investments translate into productive assets fast enough to justify the cash burn.

Tesla recorded negative free cash flow of $1.1 billion in the second quarter, its first shortfall since 2024, while shares fell in premarket trading after profits missed earnings expectations. CFO Vaibhav Taneja said Tesla was aiming to secure debt facilities that would give it capacity to borrow up to $30 billion.

Taneja also said spending would ramp up over the next 2-3 years as Tesla builds a solar panel factory, installs more AI compute, and begins work on a “Terafab” semiconductor fab with SpaceX.

Tesla’s approach fits into a wider AI race in which large technology companies are spending heavily on infrastructure. The article notes Google recorded negative free cash flow of nearly $6 billion in its second-quarter earnings and raised full-year capex predictions to as much as $205 billion.

Musk described Tesla’s capex efficiency as “off-scale good” because the company is investing in factories and infrastructure at the same time. He also called the effort “probably” the fastest industrial scale-up since World War II in America.