While Tesla (TSLA) is having a tough time in 2026, traditional automakers are making merry. Both Ford (F) and General Motors (GM) raised their 2026 profit and cash flow guidance in their respective second-quarter earnings releases, with shares soaring after the reports. Tesla also raised its guidance, only not for earnings. The company raised its artificial intelligence (AI) capital expenditures guidance — a figure that's making markets increasingly wary.
While Ford and GM are raking in free cash flow (FCF) selling internal combustion engine (ICE) cars — which Tesla CEO Elon Musk has previously compared to “steam engines” and called a “passing fad” that would “look cool in a museum” — Tesla is expected to post negative FCF this year due to the burgeoning capex. Specifically, Tesla expects its AI capex to be more than $25 billion. CFO Vaibhav Taneja said during the Q2 earnings call that capex would only increase over the next couple of years on higher outlays toward Optimus, Robotaxi, AI infrastructure, and the upcoming semiconductor fab.
