Tesla's quarterly financial update shows capital expenditure more than doubling in Q2, from $2.5 billion in the prior quarter to $5.8 billion, according to the company's earnings PDF. That spending left Tesla with negative free cash flow of $1.1 billion, an 848 percent decline year-on-year, and the company expects full-year capex to top $25 billion.

On the earnings call, Elon Musk described a planned facility in Austin called 'Terafab' as an 'amazing initiative' and confirmed equipment orders had already been placed. He said the fab is meant to combine lithography mask production, logic, memory, packaging, and chip testing under one roof to enable fast iteration, calling it a 'high-risk, high-payoff bet on AI chips.' Musk said Terafab is necessary because Tesla otherwise could not secure enough AI chips to scale production of Optimus, its humanoid robot.

On the core car business, Tesla delivered 480,126 vehicles in Q2, up 25 percent year-on-year, pushing total automotive revenue past $20 billion. However, operating margin fell to 1.4 percent from 4.1 percent a year earlier.

Musk reiterated that Optimus 'will be the biggest product' Tesla makes, while acknowledging it remains 'a very complex problem to solve,' and claimed Optimus would be the first humanoid robot able to perform generalized tasks, pointing to competition from Chinese humanoid-robot makers. On the Robotaxi program, he said Tesla was scaling 'as fast as humanly possible' under regulatory scrutiny while trying not to harm anyone or, in his words, 'run over a pet.'

Asked about a possible combination with SpaceX, Musk said he could not discuss it on Tesla's earnings call; Tesla general counsel Brandon Ehrhart instead noted the companies have a beneficial partnership with 'numerous beneficial transactions.' Following the results, Tesla shares fell in after-hours trading, and SpaceX shares continued sliding, closing just above $115 — below their $135 IPO price and well off a $225 peak.