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Automakers come to accept that the EV revolution has begun
The last several months have been busy in the electric vehicle revolution. Governments have been announcing their phase out plans for petrol vehicles and automakers have committed billions of dollars to electrification programs. At this point automakers are practically falling over each other racing to get out their announcements. How many electric vehicles they’re developing, how much they’re investing, are they going fully electrified, and when. Suddenly no one wants to be perceived as falling behind in this revolution. And why should they? Nokia and Blackberry can attest to what happens if you do.
In the past, established automakers have been very cautious with electrification, with many simply watching to see how the situation developed. Generally, their investments could be best described as vague or immaterial to their core business of making cars. That’s clearly changed – take a look at the timeline of announcements below.
Taken as a whole these announcements are really quite striking. Most recently it was GM and Ford that released their competing declarations of electrification. GM with twenty new fully electric vehicles by 2023 and Ford quickly following up to say they had a new dedicated team for fully electric vehicles, while reiterating their previously committed $4.5 billion in investments for 13 new electrified vehicle options. Ford followed up the next day to say they were also diverting one third of their investments from combustion vehicle development.
The month prior was filled with even more announcements, including tweets between Elon Musk and Mercedes about the size of the latter’s investments. Volkswagen, BMW, Mercedes, Jaguar, Honda, BYD, and Dyson all made significant announcements about their EV programs that month, but it was Volvo’s “fully electrified” announcement that first caught the media’s attention back in July. It was a clever, if somewhat misleading PR move, but it did set important targets for their company and the competition. The fact that Tesla started producing their mass market Model 3 was almost lost amongst all this news. That’s an exaggeration of course, but only a year ago many believed their plans were impossible.
Government announcements have been another important part of the narrative, with targets that provide direction and impetus to the industry. Based on some of the lobbying it hasn’t been entirely welcome, but that’s to be expected. Anytime an entire country is talking about completely phasing out your current business model, it’s going give an industry pause. In this case there were multiple, with China, the UK, France, India, and several others weighing in with their plans to phase out combustion vehicles.
Looking at these announcements together suggests that a new phase in the electric vehicle revolution has begun. The fundamentals behind this shift are what I will argue here. My proposition is that the combined macro-economic drivers of regulation, competition, and market growth are pushing EVs to the mainstream. Be forewarned, it’s a long post, but analyzing any of these factors in isolation loses the bigger picture. Electric vehicles are coming, of that there can be no doubt.
Regulation, competition, and market growth.
You’ll notice the analysis below centers around plug-in electric vehicles (PEVs). Today a little more than 60% of new EV sales are pure battery electric vehicles (BEVs) and the rest are plug-in hybrid electric vehicles (PHEVs). PHEV’s are a transitionary technology, which currently offer some benefits that will disappear as battery costs continue to fall and range continues to increase. Note that the analysis doesn’t include hybrids without plugs, they’re old news. Also note that in talking about vehicles and vehicle sales, these are always in reference to passenger vehicles (i.e. no freight trucks). Annual passenger vehicles sales data was taken from the International Organization of Motor Vehicle Manufacturers and electric sales information is from the International Energy Agency.
Regulation:
The 2015 Paris climate agreement requires country specific greenhouse gas reductions by 2030 or sooner. As part of the agreement countries must also submit annual reports on their progress. Transport is a key part of each country’s emissions and it’s one that has a solution at hand, hence the plans to phase out combustion vehicles. France and UK announced for bans by 2040, Scotland by 2032, Netherlands 2025, Norway 2025, and India and China in development. There’s some subtlety to each. Norway for example is leaning towards economic levers to achieve their goals in lieu of outright restrictions, while India has said they expect all vehicles to be electric by 2030 without regulation being necessary, though their official policy is expected later this year.
Personally I tend to agree. I expect we will all be buying electric vehicles long before 2040 largely due to economics, especially with carbon pricing. That said, all of the government announcements are important. They provide both the public and automakers a framework in which to operate, while the more aggressive targets are actually moving the industry forward.
California and nine east coast states have long mandated a portion of sales be zero emission vehicles (ZEVs), administered through a credit system. The system gives partial credit to plug-in electric vehicles (PEVs) and more credits to long range zero emission vehicles (ZEVs). It’s basically the reason automakers have produced ZEVs in the USA. In quite possibly the biggest announcement of the year China is now doing something similar. They’ve mandated a ‘new energy vehicle’ credit requirement of 10% of sales in 2019 and 12% in 2020. Since one EV can be responsible for multiple credits it means that less than 12% of all vehicles sold will be required to be zero emission vehicles. For example, if the requirement was met with vehicles like the BMW i3, it would mean 4.6% of all vehicle sales in China would be ZEV in 2020, about 1.4 million that year. For reference there are about 2.5 million PEVs on the planet right now.
China is also looking at establishing a date for complete phase out of petrol vehicles, which has caught California’s attention. California is not eager to lose their leadership position in electric vehicles and is now looking to increase their own targets and establish their own timeline for complete phase out. I believe the quote from their governor was “Why haven’t we done something already?”. It seems that an EV target race has begun and that means mandated growth for the EV market.
source: BMW
Market Growth:
This one has always been a bit of ‘chicken or the egg’ scenario. Historically demand for electric vehicles was low, which automakers referenced as the reason for their limited offerings. Others argued that there could be no demand when so few options were available, especially when those that did exist had such weird aesthetics (which was an effective way to prevent scavenging from more profitable combustion sales). Tesla flipped this around with their preorders of the Model 3 and showed everyone the latent demand to the tune of nearly 400,000 preorders. Other automakers took notice. BMW even started having widespread video presentations depicting the threat of Tesla to motivate their employees.
If you’ve only heard the rhetoric of how electric vehicles constitute a small fraction of the world’s annual sales, you might have missed something important. Exponential growth. Since 2012 growth of plug-in electric vehicles has been over 40% every year. Cumulatively that means 10x more PEVs will be sold in 2017 than 2012, as shown in the graph below.
Historical data from the IEA, 2017 estimate from EVvolumes.com
Don’t get me wrong, the existing market share is almost laughably low at 1.1% worldwide (2016 data from the IEA), but over the last three years sales have grown at an average 54.6% compound annual growth rate (CAGR).
To illustrate the effect of exponential growth consider the following example about bacteria in a jar. If the number of bacteria doubles every minute and after 1 hour the jar is full of bacteria, that means at 59 minutes the jar is half-full, at 58 minutes ¼ full, at 57 minutes 1/8 full, etc. At 54 minutes that jar is only 1.6% full and everyone is thinking that bacterial will never fill the jar. It’s simplistic and exaggerated but that’s where we are today, at 54 minutes.
The example shows the power of exponential growth but also the challenge in forecasting it. Over the long term, small changes in annual growth rates can have big impacts. Solar power projections were notoriously underestimated and each year forecasts had to be revised upwards. That’s not to disparage the forecasters, it’s incredibly difficult to do what they do and certainly some caution in forecasting is warranted. But it is worth considering that electric vehicles may be in a similar situation. For example, Bloomberg New Energy Finance (BNEF) posted an EV outlook report in 2016, estimating that annual sales in 2040 would be 35% of all vehicles sold and the total PEV fleet would be 410 million. This year they revised those projections up, to 54% and 600 million. That’s 200 million more EVs, on a starting estimate of 410 million, after one year of new data. Will the next years’ forecasts also be revised upwards?
Shorter timeframes are usually more accurate, BNEF’s numbers indicate they expect approximately 2.5 million PEVs to be sold in 2020. That seems reasonable, but it would mean that PEV sales growth slows to 35% annually for the next few years. With more models coming that have better features and lower costs, and with governments now pushing the market with more aggressive targets, it seems unlikely growth will slow. So as an experiment what happens if the 54.6% growth rate over the last three years continues, to 2020 and 2025?
The impact would be impressive. The graph indicates that over 4 million PEVs would be sold in 2020, for 5% of total vehicle sales. That jumps to 37 million PEVs sold in 2025, nearly 40% of the total vehicle sales predicted. Contrast that with BNEF numbers, of 3% of sales in 2020 and 8% in 2025. Personally I think 8% is a low estimate for 2025, it works out to a compound annual growth rate of approximately 25%. Interestingly UBS increased their 2025 PEV estimate upwards by 50% this year (from 2016) to 14% of total sales – showing that short-term projections can be just as uncertain.
Perhaps 54.6% isn’t feasible, although Tesla has nearly managed it with a 47% growth rate since 2013. They did this while building up their staff, infrastructure, technology, and procedures virtually from scratch all at the same time. It’s also worth considering the history of smartphones. Globally smartphone sales grew at a rate of 46.4% year over year for ten years from 2004 to 2014, growing from sales of 27 million a year to over a billion. It was even more dramatic in China, where smartphone users accounted for about 5% of mobile subscribers in 2010 but were 70% by 2015 (Statista). That’s in just 5 years.
Data from www.gartner.com
Granted smartphones are not cars. The average smartphone costs orders or magnitude less and is traded in every two years, while the average car is traded in every 6.5 years (in the USA). A smartphone apparently has an average total lifespan of 4.7 years and a car can last to ~200,000 miles, approximately 15 years of average driving.
But electric cars do offer something cell phones never have. A lower cost. Cell phones provide a wealth of new functionality in our lives, but generally at a premium. Today, electric cars already cost less to operate than combustion vehicles, by 2018 they are expected to reach cost parity on total cost of ownership (UBS report), and by 2025 Bloomberg expects them to cost less upfront than combustion vehicles. That’s battery only electric vehicles (BEVs). Perhaps the changeover is longer than it was for cellphones, but once BEVs have an upfront cost less than petrol, why would anyone buy anything else?
Competition:
More and more manufacturers are entering the electric vehicle field with legitimate programs and their EVs are getting excellent reviews. At the end of 2016 the Chevy Bolt came out and won the North American and Motor Trend car of the year awards. Be prepared to see future EVs dominate the awards. VW already has a new e-Golf, Nissan a new Leaf, BMW an updated i3, Hyundai released their Ionic, and Audi, Porsche, and Jaguar are all coming out with pure EV models in 2018. Then there are the massive “electrification” shifts from the likes of Mercedes, BWM, Volvo, Austin Martin, VW, Ford, GM, and others. All now committing to reshaping their companies and the industry by moving to electric vehicles. There’s also that company Tesla which started making their game changing Model 3. Suddenly there’s a lot of competition and if your company isn’t one of those competing…. what are you doing? Those automakers on the sidelines are starting to look obsolete and it’s a short road from obsolete to ‘out of business’. 
With automakers and governments committing to electrification of vehicles, we are going to see a significant ramp up in the electric vehicle market. More plug-in options are coming out, billions are being invested, and governments are seriously planning the end of combustion vehicles. It really is a paradigm shift. In large part we have Tesla to thank. If they hadn’t shown the world what was possible, who knows when this would have happened. Certainly the future would be a bit darker.
SpaceX has officially acquired xAI, merging rockets with AI expertise in what is the first move to bring Elon Musk’s companies under one umbrella.
On February 2, SpaceX officially announced the acquisition of xAI, uniting two powerhouse companies under a single entity, creating what the space exploration company called in a blog post “one of the most ambitious, vertically integrated innovation engines on (and off) Earth.”
🚨 BREAKING: Elon Musk has posted a new blog on SpaceX’s website confirming the acquisition of xAI pic.twitter.com/TFgeHGMpXc
— TESLARATI (@Teslarati) February 2, 2026
The deal will integrate xAI’s advanced AI capabilities, including the Grok chatbot and massive training infrastructure, with SpaceX’s rocket technology, Starlink satellite network, and ambitious space exploration goals.
The acquisition comes at a pivotal moment: xAI is valued at around $230 billion as of late 2025, and has been racing to scale AI compute amid global competition from companies like OpenAI, Google, and Meta. Meanwhile, SpaceX, which was recently valued at $800 billion, is facing escalating costs for its multiplanetary ambitions.
By combining forces, the merged entity gains a unified approach to tackle one of AI’s biggest bottlenecks: the enormous energy and infrastructure demands of next-gen models.
Musk wrote in a blog post on SpaceX’s website that:
“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses! The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called “space” for a reason.”
Musk details the need for orbital data centers, stating that his estimate is that “within 2 to 3 years, the lowest cost way to generate AI compute will be in space.
This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.”
SpaceX recently filed for approval from the FCC to launch up to one million solar-powered satellites configured as high-bandwidth, optically linked compute platforms.
These facilities would harness near-constant sunlight with minimal maintenance, delivering what the company projects as transformative efficiency.
Musk has long argued that space offers the ultimate solution for power-hungry AI projects. But that’s not all the merger will take care of.
Additionally, it positions the company to fund broader goals. Revenue from the Starlink expansion, potential SpaceX IPO, and AI-driven applications could accelerate the development of lunar bases, as Musk believes multiplanetary life will be crucial to saving civilization.
Critics question the feasibility of massive constellations amid orbital debris concerns and regulatory hurdles. Yet, proponents see it as a bold step toward a multiplanetary computing infrastructure that extends human civilization beyond Earth.
The Tesla Model Y Performance was in my hands for seven days after the company reached out and got me a brand new unit. As a Premium All-Wheel-Drive owner, I was really interested to see if the Performance trim was worth the $11,000 difference, and what I learned might be a surprise.
The only “performance” version of any Tesla vehicle I’ve had the opportunity to have several days with was the Cyberbeast back in June, and a few days with that made me want a Cybertruck more than I already did. It had white-knuckle speed, and as someone who truly loves to drive a larger vehicle, it fit the bill for everything I wanted out of an electric pickup.
We picked up the Tesla Model Y Performance yesterday!
We have a whole SEVEN days with it and we want to do anything you’d like us to (within reason) with it!
Let us know below 👇 what you’re interested in knowing pic.twitter.com/BRG9nOSwGW
— TESLARATI (@Teslarati) January 20, 2026
With that past experience, I was truly excited to try the new Model Y Performance, especially considering I own a Model Y already, and after six months of ownership, it has truly won me over as the best car I’ve ever owned. Although my 2008 Ford Escape Hybrid is a close second, mostly due to nostalgia and it being my “dream car” as a kid in high school at the time, the Model Y is unequivocally better, obviously. It’s hard to shake the feelings of your first “nice” car; I think we could all relate to that in a way.
First charge in the Tesla Model Y Performance!
This is a v2 Supercharger, so not quite as fast as what we’d like, but it will do for now. pic.twitter.com/Akyb2BLMcS
— TESLARATI (@Teslarati) January 21, 2026
Before I even picked up the Model Y Performance, I was expecting a handful of things: better performance, better handling, more comfortable seats, and a thirst for spirited driving on the windy backroads of Southern Pennsylvania. Admittedly, a snowstorm disrupted a lot of my testing, but I was still able to have some fun in the car.
With that being said, my thoughts are sure to potentially ruffle some feathers.
First Impressions of the Tesla Model Y Performance
I picked up the Model Y Performance on January 19 and had it for one week. The Ultra Red paint with the White interior option was a great look, and it was fun to have a car with that look, considering my Model Y is Black on Black.
One thing that is really interesting and somewhat surprising is that Tesla hasn’t adjusted the fact that the Ultra Red is a different shade than the Performance brake calipers. Additionally, the rear light bar, which signals braking, is a different shade of red than the car and the brake calipers.
This was something that the Tesla Showroom employees pointed out to me, and, just like they said, I’ll never be able to not see it.
Interior Quality
The first thing I noticed was the Performance seats, which are geared to hug you a tad more and keep you intact during spirited drives. They were, without a doubt, more comfortable than the seats in my Premium AWD.
Interestingly, when I gave this opinion on X, some Performance owners said that the seats were less comfortable and, on longer drives, I’d feel it. My Fiancè and I drove about 120 miles in the car that weekend, and we had no complaints. They were supremely comfortable, and we both really enjoyed them, almost to the point that we’d rather have those seats than the ones in the Premium AWD.
🚨 Tesla Model Y Performance White Interior is 🔥
This seriously might be the best Tesla out there pic.twitter.com/BnSe1GJqqi
— TESLARATI (@Teslarati) January 22, 2026
Additionally, the center screen is slightly larger, but not to the extent that I had really noticed any true difference. In the new Model Y for 2026, the screen is the same size as the one in the Performance trim at 16 inches.
It was previously 15.4 inches.
Some other changes include Performance pedals that are made of what appears to be a stainless steel alloy and Carbon Fiber accents on the doors and dash. Other than that, there are no significant differences; it’s very similar to the other Premium trims of the Model Y. The big difference from an interior standpoint is simply the front seats.
Exterior Differences
Tesla used a lot of different techniques to help improve performance and aerodynamics, including a carbon fiber spoiler and rear diffuser, both of which help with air displacement and improve handling, range, and overall performance.
These additions are clean and give the car a sporty look, perfectly catered to the aesthetic Tesla was obviously going for with the car. I’ve already mentioned the brake calipers, which are an awesome touch, but the offsetting tones of red between them and the paint are a bit displeasing to the eye. I hope this is something that is resolved, but it isn’t completely necessary, nor a priority.
The Nitty Gritty – Ride Quality and Performance
With all the changes from an aesthetic standpoint, including the ones that are geared toward improving performance, the real indicator of whether this trim is worth the extra $11,000 is simple: Is it faster and more fun to drive than the Premium All-Wheel-Drive?
I’m going to break that down here:
Speed and Acceleration
There is a slightly noticeable difference in acceleration, as the 4.6-second 0-60 MPH on the AWD is 1.3 seconds slower than the 3.3-second rate on the Performance. Although that sounds like a decent difference, the big change I noticed was the sound. In the Performance, you can really hear those motors hum, which was a nice touch and really interesting and fun to experience.
It was definitely quicker than my AWD, but I think I really expected to be thrown back into my seat like I was with the Cyberbeast, which features a 2.6-second 0-60 MPH acceleration rate. That was truly a massive difference that anyone can really feel. The 1.3-second difference between the AWD and Performance was, in a way, underwhelming.
I was not disappointed with it, but I really hoped to feel that same rush of adrenaline I had with the Cyberbeast. I think I’m just so used to the acceleration at this point that it does not “wow” me any longer. At the time of the Cyberbeast Demo Drive, I was still driving a gas car.
The Performance, like the AWD, is very capable. It’s great for merging on the highway and getting into a tight window when traffic is heavier. It’s great for taking some quicker drives, and it’s a lot of fun to take out on the road. By no means am I disappointed with it, but I will say maybe my expectations were a tad too high.
Handling
This is where I will say I was sort of disappointed, because I have heard from many people that the suspension is better in the Model Y Performance compared to the All-Wheel-Drive.
I didn’t really feel like it was “better,” but the same, which is still an absolutely amazing ride experience. My AWD is great for tight turns at increased speeds, where I felt the difference was in the seats, as those Performance ones truly did seem to “hug” me more and keep me more stable.
The Performance trim features adaptive suspension, lower/stiffer springs, and larger wheels, all of which are meant to improve handling. I’m not sure if it is simply because I didn’t get to push it as much as I wanted to due to weather, but I felt like the feel of the ride was really similar to my AWD. I had no complaints.
Overall Thoughts
The Model Y Performance is definitely a sportier look than the AWD and Standard models, and it definitely has its advantages. I think that it’s a really great car, but I did not feel an incredible number of differences from the AWD.
🚨 ONE WEEK with the Tesla Model Y Performance: Review and Initial Thoughts
We didn’t get to have as much fun as we wanted in the MYP due to the snow storm, but we were able to give some initial thoughts on the car with the little bit of reasonable weather we had pic.twitter.com/C75WQMNHKO
— TESLARATI (@Teslarati) January 27, 2026
There was a lot to love: the seats, the look, the acceleration. The latter is something that is definitely great if you plan to take your car to a track, but for public roads, it’s not something that is a substantial “need.” When I pushed it on a road local to me and posted a video of it, the commenters were sure to tell me I was going too fast.
I want to be clear that I have zero complaints about the Model Y Performance, and if it were to have come out ahead of me getting my AWD, I probably would have entertained the idea if I could have made the numbers work.
The Model Y, from Standard to Premium, is a great car in every sense of the word. The ride quality is great, the build quality is excellent, and the interior and exterior features, as a whole, make it the best car in the world (to me).
Elon Musk
Elon Musk explains why Tesla’s 4680 battery breakthrough is a big deal
Tesla confirmed in its Q4 and FY 2025 update letter that it is now producing 4680 cells whose anode and cathode were produced during the dry electrode process.
Tesla’s breakthroughs with its 4680 battery cell program mark a significant milestone for the electric vehicle maker. This was, at least, as per Elon Musk in a recent post on social media platform X.
Tesla confirmed in its Q4 and FY 2025 update letter that it is now producing 4680 cells whose anode and cathode were produced during the dry electrode process.
Why dry-electrode matters
In a post on X, Elon Musk stated that making the dry-electrode process work at scale was “incredibly difficult,” calling it a major achievement for Tesla’s engineering, production, and supply chain teams, as well as its partner suppliers. He also shared his praise for the Tesla team for overcoming such a difficult task.
“Making the dry electrode process work at scale, which is a major breakthrough in lithium battery production technology, was incredibly difficult. Congratulations to the @Tesla engineering, production and supply chain teams and our strategic partner suppliers for this excellent achievement!” Musk wrote in his post.
Tesla’s official X account expanded on Musk’s remarks, stating that dry-electrode manufacturing “cuts cost, energy use & factory complexity while dramatically increasing scalability.” Bonne Eggleston, Tesla’s Vice President of 4680 batteries, also stated that “Getting dry electrode technology to scale is just the beginning.”
Tesla’s 4680 battery program
Tesla first introduced the dry-electrode concept at Battery Day in 2020, positioning it as a way to eliminate solvent-based electrode drying, shrink factory footprints, and lower capital expenditures. While Tesla has produced 4680 cells for some time, the dry cathode portion of the process proved far more difficult to industrialize than expected.
Together with its confirmation that it is producing 4680 cells in Austin with both electrodes manufactured using the dry process, Tesla has also stated that it has begun producing Model Y vehicles with 4680 battery packs. As per Tesla, this strategy was adopted as a safety layer against trade barriers and tariff risks.
“We have begun to produce battery packs for certain Model Ys with our 4680 cells, unlocking an additional vector of supply to help navigate increasingly complex supply chain challenges caused by trade barriers and tariff risks,” Tesla wrote in its Q4 and FY 2025 update letter.
SpaceX officially acquires xAI, merging rockets with AI expertise
Tesla Model Y Performance Review: The Best Trim of the Best Vehicle?
