Tesla Stock Falls 18% in Worst Week Since 2022 as Investors Balk at Spending

Tesla's stock price collapsed 18% in the week ending July 24—its worst one-week performance since 2022—following the company's second-quarter earnings report released on July 22. Despite reaching historic revenue milestones, the market punished the stock due to a sharp deterioration in Tesla's financial health and heavy spending on uncertain future ventures.

On the revenue side, Tesla delivered strong top-line growth. The company delivered 480,126 electric vehicles in Q2, up 25% from a year earlier, generating $28.23 billion（約4.5兆円） in total quarterly revenue. EV sales alone contributed $20.51 billion（約3.3兆円）, up 23% from the prior year. Over the trailing 12 months, Tesla surpassed $100 billion（約16兆円） in sales for the first time in the company's history. Yet these gains masked serious profitability challenges. Operating margins plummeted to 1.4% in Q2 from 4.1% a year ago—a decline of 2.7 percentage points. Operating expenses jumped 47% to $4.35 billion（約7000億円）. More alarming, Tesla reported negative free cash flow of $1.1 billion（約1800億円） in the quarter, and its cash and investments fell by $1.2 billion（約1900億円）.

The cash drain reflects massive capital expenditures. According to CFO Vaibhav Taneja, capex more than doubled sequentially and is expected to keep rising through the second half of the year. Tesla issued guidance for $25 billion（約4兆円） in capex spending for the full year and announced plans to borrow up to $30 billion（約4.8兆円）. These investments are directed at artificial intelligence and robotics—specifically, autonomous driving technology and the Optimus humanoid robot. Tesla is running early versions of its v15 autonomous driving software in robotaxis, but the company has provided no timeline for nationwide rollout and acknowledged regulatory uncertainty. Optimus production is being prioritized by discontinuing Model S and X manufacturing at the Fremont, California, factory; robots produced on that line will be used for further training and development of hardware and AI software, but commercial sales remain distant.

The market's reversal reflects a breakdown in investor tolerance for Tesla's traditional valuation model. The stock has long commanded a forward price-to-earnings ratio of 170—a multiple justified only by faith in Musk's long-term vision. With operating margins now razor-thin at 1.4%, negative free cash flow, mounting capex obligations, and no clear path to revenue from robots or autonomous vehicles, that faith has been shaken. The stock decline has had profound personal consequences: Musk's net worth, according to the Bloomberg Billionaires Index, has fallen to $709 billion（約110兆円） from more than $1 trillion（約160兆円） earlier this year, erasing $300 billion（約48兆円） in a matter of weeks. Musk acknowledged the loss in a social media post on X, writing simply, "(Former) Trillionaire."

Tesla's stock decline reveals a widening gap between the company's revenue growth and its actual profitability. Deliveries rose 25% to 480,126 vehicles in Q2, and the company reached a historic milestone of more than $100 billion（約16兆円） in trailing-12-month sales for the first time. Yet beneath this headline strength, the fundamentals deteriorated sharply: operating margins compressed to just 1.4% from 4.1% a year earlier, while operating expenses jumped 47% to $4.35 billion（約7000億円）. This margin collapse, combined with negative free cash flow and a $1.2 billion（約1900億円） decline in cash and investments, signals that Tesla is spending far more than it is earning.

The root of this aggressive spending lies in Musk's AI and robotics ambitions. The company is plowing capital into autonomous driving software (currently in early v15 versions for robotaxis) and the Optimus humanoid robot line, neither of which is close to commercial deployment or regulatory approval. By discontinuing Model S and X production at the Fremont factory to make room for Optimus development, Tesla is deliberately sacrificing near-term revenue for a bet on technology years away from market. The market has historically rewarded Tesla stock based on Musk's vision, tolerating a forward P/E of 170 even after the recent collapse. However, investors appear to have reached a breaking point: massive capital spending ($25 billion（約4兆円） guidance for the year, plus $30 billion（約4.8兆円） in planned borrowing) combined with deteriorating cash generation and unclear timelines for revenue from new products have eroded confidence that this bet will pay off.