Tesla delays Cybercab, Semi and Megapack volume production

Tesla said in the letter that it’s trying to increase battery production — specifically the 4680 cell — in order to start building the Cybercab and Semi at scale. It gave no reason for pushing back volume production of the Megapack. The company also dropped language from its first-quarter letter that had said its Optimus humanoid robot would reach “volume production,” and CEO Elon Musk cautioned on a Wednesday call that Optimus “is going to be the hardest product to scale manufacturing that we’ve ever made at Tesla, because everything on the robot is new.” As recently as January, Tesla had said the Cybercab, Semi and Megapack 3 would reach volume production this year. The company has started making the first production Cybercabs at its Austin, Texas factory but is still building out the manufacturing lines for the Semi and Optimus.

The pullback comes as Tesla pours money into its next generation of products while attempting to shift from an EV maker to an AI and robotics company. Second-quarter net income fell 5% year-over-year to $1.1 billion, capital expenditures more than doubled, and free cash flow turned negative, even as revenue climbed. Tesla reported revenue of $28.2 billion, a 26% increase from the $22.5 billion it generated a year earlier and up from the previous quarter’s $22.38 billion. Automotive revenue rose to $20.5 billion from $16.6 billion, as the company delivered more than 480,000 vehicles in the quarter — an increase of more than 120,000 from the prior quarter and its best delivery result since the third quarter of last year, when it delivered nearly 500,000 vehicles. Energy storage and solar revenue improved 13% to $3.1 billion, and subscriptions to its Full Self-Driving (Supervised) driver-assistance system reached 1.48 million, up 56% year-over-year.

Even so, operating expenses ballooned 47% to $4.3 billion, free cash flow was negative $1 billion — a stark reversal from $1.44 billion in positive free cash flow the prior quarter — and operating income fell 57% to $398 million from $932 million a year earlier. Tesla has said capital expenditure will reach $25 billion in 2026, about three times more than it has historically spent, as CFO Vaibhav Taneja had previously said the product push would lead to negative cash flow for the remainder of the year.

Why it matters

Tesla’s pitch to investors now rests on unproven robotics and autonomy products arriving later than promised, even as its core EV business posts its strongest delivery quarter in nearly a year.