unprecedented! Tesla’s market value evaporated by 1.45 trillion overnight, and its aggressive cash-burning plan was severely questioned

unprecedented! Tesla’s market value evaporated by 1.45 trillion overnight, and its aggressive cash-burning plan was severely questioned.

Tesla's stock price plummeted on Thursday, with more than $200 billion in market value evaporating overnight, setting a record for a single-day market value loss in the company's history, as investors were concerned about CEO Musk's remarks about "spending money as fast as possible." They believe that the information released on Tesla’s earnings call does not justify its massive spending plan.

As of Thursday's close, Tesla's stock price fell 14.5%, the largest single-day decline since March 10, 2025. At that time, Musk's series of political actions put pressure on the company's stock price.

The company's market value evaporated by US$214.5 billion (approximately 1.45 trillion yuan) that day, setting a record for the largest single-day market value shrinkage in history. Its current market capitalization is approximately US$1 trillion. The magnitude of this fluctuation is unusual.

Dow Jones market data shows that Tesla's stock has fluctuated on average about 8% after earnings reports over the past five years. The day before, Tesla announced its second-quarter financial report, which showed that revenue exceeded expectations driven by strong car sales; however, profits fell short of expectations due to lower car prices.

In addition, Tesla's free cash flow turned negative for the first time in more than two years. Tesla reiterated that capital expenditures are expected to exceed US$25 billion this year (representing a year-on-year growth rate of approximately 200%), and will continue to grow in the next two to three years.

Musk boasted on the conference call that Tesla is undergoing the fastest industrial expansion in the United States since World War II. He emphasized that this year is an extremely large year for capital expenditures, but he is confident that all projects invested in will generate incredible returns.

"We should invest capital as quickly as possible without creating too much waste," Musk said.

“It doesn’t matter if it’s a little less capital efficient if you can get things done faster.” Radical money-burning plan under severe questioning But investors didn't buy it, believing that Tesla's performance and the information released on the conference call were not enough to justify such a large-scale capital support plan.

Oppenheimer analyst Colin Rusch said in a note to clients that despite strong sales of electric vehicles, Tesla did not talk much about its key growth engines Optimus and Robotaxi (on the conference call) given that huge technical challenges remain.

Regarding the Optimus humanoid robot, Tesla did not disclose more details except that it admitted that the project is extremely difficult and will still face challenges in the future.

During an after-hours conference call with investors on Wednesday, Musk emphasized that there is currently no mature supply chain in this field and that it is extremely complex to design a robotic arm that can imitate human hand movements. He also said the robot would be put into production "soon", although initial output would be limited.

While Musk remains confident in Tesla's humanoid robots, the company's management has not disclosed plans for the release of the third-generation Optimus, which was originally expected to debut earlier this year. Regarding the Robotaxi (self-driving taxi) network, Tesla revealed more information.

The business has continued to expand over the past 13 months and has recently entered several new markets. Tesla currently provides online ride-hailing services in seven cities, six of which have achieved unsupervised operations. In addition, the company is working to increase the production of Cybercab models.

Ashok Elluswamy, Tesla's head of artificial intelligence, predicted that the company may eventually operate on an "entire state" basis rather than advancing city by city. Both he and Musk emphasized the company's emphasis on safety, with Musk warning that any injuries or fatalities could trigger intense scrutiny from regulators.

Self-driving taxis are one of the areas Tesla investors are focused on. On Wednesday, the company announced a slew of new data, including that its robotaxi has completed more than 380,000 miles of unsupervised driving. Elluswamy said that since the beginning of 2026, Tesla’s weekly unsupervised driving mileage has maintained double-digit growth.

However, Future Fund managing partner and former Tesla investor Gary Black called these metrics "largely irrelevant." He said Tesla "seems unwilling or unable to reduce uncertainty around business expansion" which is "clearly" dragging down the stock price.

In a report, Morningstar analyst Seth Goldstein attributed Tesla's share price decline to its capital expenditure plan and lower-than-expected second-quarter earnings.

Rusch also called the financial results "lack of bright spots" and lowered his profit forecast for Tesla, pointing out that the company has "huge" execution risks and is in desperate need of capital. Morgan Stanley analyst Andrew Percoco believes Tesla needs to provide a clearer plan.

It's still up in the air when the company will start seeing returns on its investment. "In the absence of sustained, transparent evidence, we expect the market to be less tolerant of additional capex," the analyst added. He lowered his Tesla price target to $400 from $417.

Percoco expects Tesla's capital expenditures in 2027 to be close to $30 billion, up from its previous forecast of $20 billion, which will result in an expected $14 billion cash gap that year. According to FactSet consensus forecast, Tesla's cash gap in 2026 is expected to be US$9 billion.

#Stocks #Tesla #EVs #AI #Gold