Investor's Corner
The ‘Tesla Effect’ is wrecking Europe’s luxury brands in the 2nd-hand market
There was once a time when plush leather seats, chrome-trimmed knobs, metal buttons, and a loud, grumbling engine were the hallmarks of a luxury vehicle. That was the status quo for a very long time, but with the emergence of Tesla and its tech-focused approach to cars, these age-old definitions of luxury in the automotive industry are getting disrupted.
In a recent article, American bank holding firm Capital One opted to examine a phenomenon in the second-hand luxury car segment that it dubs as “The Tesla Effect.” According to the financial firm, the influx of sales generated by Tesla consumers’ reaction to the brand amid the release of more attainable vehicles like the Model 3 has pretty much wrecked the pre-owned luxury segment. And the biggest victims of the Silicon Valley-based electric car maker are some of Europe’s strongest brands.
A key vehicle in this transition is the Tesla Model 3, which went from zero to 140,000 units sold faster than any other luxury car before. The market’s interest with the electric sedan has been consistent, to the point where it is now a driving force in the US’ used luxury car segment. As more and more luxury car owners trade in their vehicle for a Tesla, traditional high-end brands like BMW and Mercedes-Benz are getting the short end of the stick.
Capital One notes that Tesla currently gets European vehicles as trade-ins 22.2% of the time, over two times the industry average of 10.9%. The result of this is the second-hand market getting flooded with luxury vehicles — vehicles that are so far not seeing an increase in demand. These conditions create a perfect storm for veteran luxury automakers.
Data from the Manheim Market Report reveals that a 2018 BMW 320i lost almost 20% of its value in the first half of 2019 alone, dropping from $37,700 to $30,700. One could say that this is the case considering that the new 320i is a new vehicle, and new cars depreciate at a steeper rate, but Capital One maintains that the decline is usually not as prominent. A Mercedes-Benz B-Class also dropped nearly 30% in the first six months of the year, from $18,500 to $13,250.
A rather surprising result of The Tesla Effect is that customers in the market for pre-owned luxury vehicles could see lower prices for cars like BMW’s 3-Series. With their depreciation being so steep, customers could acquire a three-year-old BMW or Mercedes-Benz sedan at a lower price than a brand new Honda Accord or Toyota Camry.
A key driving force behind The Tesla Effect is the apparent change in priorities among luxury car buyers. While buyers of luxury cars in the past valued the exclusivity of materials used in their vehicles’ accents, consumers today appear to be more focused on how much convenience is offered by a car. In this light, a vehicle that can pull itself out of a parking spot and pick up its passengers seems to be a more preferable purchase over a car that just happens to have exclusive leather seats.
Overall, Tesla seems to be lucky enough to hit its stride at a time when consumers care most about tech and convenience. With its silent, stealthy power and its zero-emissions nature, Tesla’s electric cars are starting to become the preferred vehicle for buyers who grew up in a world where tech moves at an incredibly fast pace, and those that cannot catch the most recent update risk getting left behind.
Investor's Corner
NASA taps SpaceX to launch the telescope that could unlock new worlds
NASA’s Roman Space Telescope heads to orbit this August aboard SpaceX’s Falcon Heavy with massive scientific ambitions.
SpaceX is set to play a central role in one of NASA’s most anticipated science missions in years. The company’s Falcon Heavy rocket, currently the most powerful operational launch vehicle in the world, will carry the Nancy Grace Roman Space Telescope into orbit on August 30 from Kennedy Space Center in Florida. Roman is now in final preparations inside the Payload Hazardous Servicing Facility, where on June 26 technicians used a crane to lift the observatory into a specialized stand for fueling and pre-launch testing.
Roman is named after Nancy Grace Roman, NASA’s first chief of astronomy, whose career helped shape how the agency approaches space science.
NASA chose SpaceX Falcon Heavy because of Roman’s needs to reach a specific orbit far from Earth, well beyond where a standard Falcon 9 can deliver it. The Falcon Heavy, which first flew in 2018, has since become NASA’s go-to option for missions that need serious muscle without the cost and complexity of older launch systems.
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Roman will carry a field of view at least 100 times wider than the Hubble Space Telescope, meaning it can photograph enormous swaths of the universe in a single shot rather than the narrow slices Hubble captures. That difference in scale is significant. While Hubble reshaped our understanding of the cosmos over 30 years, Roman is built to work faster and wider, surveying hundreds of millions of galaxies at once.
One of Roman’s most compelling capabilities is its potential to discover and photograph planets orbiting stars outside our solar system, and with enough precision to directly image planets that would otherwise be lost. That means scientists could study the atmosphere and surface characteristics of distant worlds rather than simply confirming they exist. Combined with Roman’s sweeping field of view, the telescope could detect thousands of exoplanets, and some of those planets may be in habitable zones where liquid water could exist. No telescope currently in operation has this level of power and capability. That capability alone could change what we know about other worlds, and perhaps finally answer the question: are we the only intelligent lifeforms in existence?
What Roman actually finds once it reaches orbit is an open question, and that is exactly what makes this launch worth watching.
Elon Musk
California snubs Tesla in its newly passed EV incentive that favors Rivian and Lucid
California passed a $135 million EV incentive that rewards Rivian and Lucid while sidelining Tesla
California just drew a line in the EV incentive sand to put Tesla on the wrong side of it. The state recently passed a $135 million program offering first-time electric vehicle buyers a direct incentive with no application required, but the rules were written in a way that leaves Tesla at a structural disadvantage compared to Rivian and Lucid.
The program caps eligible vehicles at $50,000 for new EVs and $25,000 for used ones. That pricing threshold rules out a significant portion of Tesla’s lineup, though some lower-priced Model 3 and Model Y configurations would still qualify. California-based automakers are exempt from the price cap entirely, regardless of what their vehicles cost. Rivian, headquartered in Irvine, and Lucid, based in the San Francisco Bay Area, both benefit from that exemption. Rivian’s R2 starts at roughly $45,000 but has versions above the cap. Lucid’s Air and Gravity start at $70,990 and $79,990 respectively, well above any threshold a non-California company would face.
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Tesla built its reputation and a significant portion of its early market share in California, where EV adoption has consistently led the nation. The company operates its original factory in Fremont, California, and the state was home to Tesla’s headquarters for most of its existence. That changed in 2021 when Tesla moved its corporate headquarters to Austin, Texas. Since then, the relationship between the company and California Governor Gavin Newsom has been openly adversarial, with Musk and Newsom trading public criticism on multiple occasions.
California’s EV incentive landscape has shifted repeatedly in recent years, and Tesla has previously lost eligibility for state-level programs as its vehicles exceeded income-adjusted price thresholds. The federal $7,500 EV tax credit, which Tesla models have qualified for and lost depending on policy cycles, is no longer available after it expired without renewal, making state-level programs more meaningful to buyers than they have been in years.
The practical impact for buyers is more nuanced than the headline suggests. California residents purchasing a Tesla under $50,000 for the first time can still access the incentive. But the exemption written for California-based manufacturers is a structural advantage that rewards where a company plants its headquarters flag rather than where it builds its products, and Tesla moved that flag to Texas.
Elon Musk
SpaceX’s newest logo confirms everything about what it’s become
SpaceX officially absorbed xAI under the SpaceXAI brand, completing the largest private merger in history.
SpaceX made its corporate transformation official in May 2026 when Elon Musk posted on X that xAI would cease to exist as a standalone company. “xAI will be dissolved as a separate company, so it will just be SpaceXAI, the AI products from SpaceX,” he wrote.
A new SpaceXAI logo was announced today, visually embedding the xAI letters inside the SpaceX identity, which can be seen as a deliberate design choice that signals the merger is not a partnership but a full absorption and XAi a core function of the same company. The same way Starlink is not a separate brand but a SpaceX product. The announcement closed the loop on a process that began February 2, 2026, when SpaceX acquired xAI in the largest private merger in history, valued at $1.25 trillion. SpaceX at $1 trillion and xAI at $250 billion.
We are now @SpaceXAI. pic.twitter.com/ema66xDWC9
— SpaceXAI (@SpaceXAI) July 6, 2026
The reason SpaceX bought xAI was stated plainly by Musk at the time of the deal: to build orbital data centers. SpaceX had simultaneously filed with the FCC to launch up to one million satellites designed to function as AI compute nodes in low Earth orbit, escaping what Musk described as the energy constraints limiting AI development on Earth.
xAI provided the AI software stack, with Grok, the X platform, and the Colossus supercomputer infrastructure in Memphis with over 220,000 NVIDIA GPUs, while SpaceX provided the rockets, Starlink, and the capital base to fund it. The two companies needed each other. xAI was burning $2.5 billion in losses on $250 million in revenue. SpaceX was generating an estimated $8 billion in profit on $15 billion in revenue and needed an AI narrative to command the valuation it was targeting for its IPO.
What SpaceX has done, regardless of how the orbital AI vision ultimately plays out, is walk into a public market as something no company has been before: a rocket manufacturer, satellite internet provider, AI software company, social media platform, and supercomputer operator under one ticker. Whether that combination is worth $2 trillion depends entirely on which of those businesses you believe in most.
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