Decoding Elon Musk: Beyond the Billionaire

The world's richest man may soon also be the world's first trillionaire as Elon Musk's SpaceX targets an IPO with a valuation of around $1.5 Trillion in what would be the largest IPO ever. Muskism: A Guide for the Perplexed authors Ben Tarnoff and Quinn Slobodian join David Gura and Christina Ruffini on Bloomberg This Weekend to discuss "Muskism," referring to the ideology and worldview that shaped Musk. They say it is "an operating system for the 21st century." Tesla Inc. anticipates billions of dollars in additional spending this year to support Elon Musk’s ambitions to transform the electric vehicle pioneer into an artificial intelligence and robotics company.

Capital expenditures in 2026 will exceed $25 billion, the company disclosed along with its earnings Wednesday, roughly three times last year’s outlay. The planned investment is up from a prior forecast of around $20 billion.

“You should expect to see a very significant increase in capital expenditure,” Musk said on a conference call with analysts. Tesla shares erased after-hours gains following the comments and fell 3.2% at 10:02 a.m. in New York on Thursday.

Tesla vehicles on a transport truck in California.

The investments will be put toward a dramatic expansion of factory operations, including production of Optimus humanoid robots, AI initiatives and the autonomous Cybercab. Tesla’s traditional auto business has declined the past two years, putting greater pressure on the planned pivot to those futuristic initiatives.

The revised spending plan shows the heavy cost for Tesla to achieve its goals, said Dec Mullarkey, managing director at SLC Management. It’s “sobering up the assessment of free cash flow potential for the year.”

The automaker agreed this month to buy an unidentified AI hardware firm for as much as $2 billion of Tesla’s common stock and equity awards to help accelerate the transformation. About $1.8 billion of the price is subject to certain conditions and performance milestones, Tesla said in its quarterly regulatory filing.

Read More: Tesla to Spend $3 Billion on Chip Fab, Taps Intel for Support

WATCH: Tesla anticipates billions of dollars in additional spending this year to support Elon Musk’s ambitions to transform the EV maker into an AI and robotics company. Bloomberg’s Dana Hull reports on how investors are reacting.

In the first quarter, adjusted earnings rose to 41 cents a share, Tesla said, beating the 34-cent average of analyst estimates compiled by Bloomberg. That marked the second straight quarter of better-than-expected results.

The release offered promising updates on Tesla’s core automotive business. The company reported seeing “continued growth in demand” for its vehicles in parts of Asia and South America, along with a rebound in North America, Europe and the Middle East.

The surprisingly optimistic comments came weeks after the automaker reported lower-than-expected vehicle sales to start the year. The first quarter was the second-worst for auto deliveries since mid-2022, trailing only the year earlier period, when Tesla paused production of Model Y SUVs and dealt with widespread backlash to Musk’s political activities.

Elon Musk

The report “confirms that while the legacy EV business is no longer growing rapidly, it’s stable enough to fund Tesla’s heavy investments in robotics and self-driving technology,” Andrew Rocco, a Zacks Investment Research analyst, said in a note.

Tesla pointed to rising gas prices as a boon for its business, driving increased customer interest.

“We have seen a slight growth in terms of quarter-over-quarter deliveries on the order backlog front,” Chief Financial Officer Vaibhav Taneja said on the conference call.

Tesla will be boosting vehicle output as part of its capital expenditure plan, Musk said. The company is “laying the groundwork for what we expect to be a significant increase in vehicle production in the future,” the chief executive officer said.

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