Institution: It is expected that Tesla's global deliveries will decline for the third consecutive year by 2026, with free cash flow turning negative.

According to a March 12 report by Reuters, analysts have repeatedly cut their expectations for Tesla (TSLA.US) deliveries, forecasting that its electric vehicle deliveries may fall for the third consecutive year.

As CEO Elon Musk shifts his focus to expensive autonomous driving taxi and humanoid robot projects, Wall Street had originally expected Tesla to break the streak of declining car sales in 2026, but that outlook is changing rapidly. Analysts have sharply lowered their growth expectations from 8.2% in January to 3.8%. Well-known Tesla watchers, including Morgan Stanley and Morningstar, now expect it to see a decline.

Morningstar analyst Seth Goldstein expects Tesla’s vehicle deliveries to fall by nearly 5% this year, and expects the company’s global deliveries to decline for a third consecutive year in 2026.

Meanwhile, Tesla plans to double its capital expenditures to more than $20 billion, raising concerns about cash flow. Wall Street expects Tesla’s spending to exceed its revenue, which sharply contrasts with the positive cash flow it has generated over the past seven years. Analysts have been steadily lowering their expectations for Tesla’s 2026 auto sales revenue—they now expect the company to generate about $72 billion in revenue, down from nearly $138 billion expected two years ago.

In a report, Morgan Stanley analyst Adam Jonas said that while higher capital expenditures are necessary for Tesla’s ambitions in autonomous driving vehicles, robots, and energy, cash burn could put pressure on the stock price and the company’s valuation. Jonas expects the company to burn more than $800 million in 2026. Based on LSEG data, Wall Street now expects average free cash flow to be negative $5.19 billion, a sharp contrast to the previously expected negative $2.27 billion.