Investor's Corner
Big Oil fights back against electric vehicle revolution, “EVs are not the silver bullet everyone is looking for”
The purveyors of old technologies have always done what they could to impede the adoption of new ones, not only by pointing out the drawbacks of the new products, but also by making their old products better. In the last days of the Age of Sail, shipbuilders crafted super-fast clipper ships, which shared the seas with steamships for many years. Typewriters steadily added high-tech features, evolving into stand-alone word processors before they were superseded by computers.
However, never in history has there been an industry as profitable, powerful and all-pervasive as the oil industry – an industry whose lifeblood is a soon-to-be-obsolete technology. Big Oil, supported by its allies in the auto industry and numerous national governments, is fighting the nascent electromobility revolution on several fronts. Its decades-long campaign to discredit the science of climate change, and its financial support of backwards-looking political figures, are well known. Now that EVs are emerging as an existential threat, industry players are also working to sow doubts about their viability in the public mind – the media churns out “EVs are a bust” articles on a daily basis, often employing quotes helpfully provided by auto industry trade groups and oil-friendly think tanks.
On a somewhat more constructive front, oil producers and automakers are working together to make legacy vehicles ever more fuel-efficient, hoping to delay demand for electric alternatives.
Oil giants including Exxon, BP and Shell are working with automakers such as Ford and Fiat Chrysler to create a new generation of super-slick engine lubricants in a quest to squeeze even more efficiency out of traditional engines. “It’s really important that we are able to squeeze the lemon,” Shell VP Andrew Hepher told the Wall Street Journal. “The combustion engine has still got a long way to run…Car makers are very, very heavily motivated to improve the economy of their fleet.” BP’s CEO Bob Dudley adds, “EVs are not the silver bullet everyone is looking for.”
Governments of petroleum-producing countries are also getting proactive about prolonging the reign of the ICE. The Persian Gulf state of Qatar, which has the world’s third-largest reserves of oil and natural gas, acquired 17 percent of Volkswagen’s voting rights in 2009, becoming the third-biggest investor in VW. “We are really committed to VW,” said VW supervisory board member Hessa Al Jaber. “They are taking steps to mitigate any future risks on emissions.”
A recent article in the Detroit Free Press reports that the Saudi national oil company, Aramco, came to the Detroit auto show for the first time ever this year, to spread the word about its cutting-edge research to improve legacy gas engines.
Above: Aramco cranks up the PR machine with a booth at the Detroit Auto Show (Youtube: aramcoservices)
“In an era of climate change concerns, battery electric vehicles have become a symbol of innovation, promising to disrupt the automotive industry,” said Ahmad Al Khowaiter, Aramco’s Chief Technology Officer. “Yet hidden in plain sight are some of the most disruptive technologies the industry has ever seen; and they happen to be new and improved internal combustion engines.”
“Ironically, as countries announce plans to phase out gasoline- and diesel-powered vehicles in favor of battery electric vehicles, new fuels and engine designs are making internal combustion engines greener than ever, and far more efficient,” Al Khowaiter said.
Aramco has invested hundreds of millions in global R&D – it is the third-largest holder of oil industry patents, behind Exxon and Chevron. It has research facilities all over the world, including in Detroit and Houston, and works with researchers at Stanford, MIT and the University of Michigan.
“Public policy should be technology-agnostic,” Al Khowaiter said. “Neither the battery electric vehicle nor the internal combustion engine is the perfect solution in all scenarios; both are needed for a sustainable and affordable mobility future.”
Donald Runkle, a mechanical engineer who ran product engineering at GM, told the Free Press that fuel economy is increasing every day. “The combustion engine is not going away in the foreseeable future, not for 15 or 20 or 30 years. It has proven, and continues to prove, to be the low-cost approach to moving things. Yes, there will be electrification, adding batteries and all that. It just improves the overall efficiency of the internal combustion engine.”
Obviously, the oil and electricity camps disagree about the timeline for electrification. However, all seem to agree that any technology that reduces emissions is a good thing. Don Anair, Research Director for the Union of Concerned Scientists’ Clean Vehicles Program, acknowledged the conflicting/complementary goals. “We need an 80% or more reduction in oil use,” he told the Free Press. “No matter how you look at it, to address climate change, we can’t continue to power our transportation system with oil. We need to continue to improve emissions from conventional vehicles while we accelerate the transition toward electric vehicles powered by clean energy.”
===
Note: Article originally published on evannex.com by Charles Morris
Tesla and SpaceX shares fell on Wednesday after Democrats swept both chambers of Congress. The decline stood out as broader market securities recovered and turned positive, while both of Musk’s publicly traded companies lagged.
CEO Elon Musk already joked about the unsuccessful campaigning for the Republicans, but now the new party will make pretty drastic changes to how it handles Tesla and SpaceX, and those companies will adjust their outlook.
Let’s take a deeper look.
Tesla ($TSLA)
Tesla shares traded lower during the regular session after Democrats secured both the House and Senate. The stock was down 2.32 percent at around 1:45 p.m. on the East Coast, trading at around $389.30.
The pressure is tied to more than the raw scale of Musk’s political spending, estimated at $450–474 million this cycle with roughly $224 million directed at Texas. In that state, Tesla now faces a Democratic governor and a Democratic senator after Gina Hinojosa unseated Greg Abbott and James Talarico defeated Ken Paxton.
The Austin Gigafactory, Robotaxi pilot programs in multiple Texas cities, and any related AI compute expansion sit under a new state executive who campaigned against certain corporate subsidies and floated a moratorium on new data-center construction.
Federally, Democratic control of key committees opens the door to deeper examination of Tesla’s autonomous-driving safety record, federal energy-storage and manufacturing incentives, and the national-security implications of any combination with SpaceX.
Investors are also weighing whether the company’s historically close alignment with the prior Republican leadership will invite slower permitting, additional hearings, or tighter rules on Full Self-Driving deployment.
For Tesla, the political shift adds near-term friction around state permitting and federal regulatory approvals for autonomy and energy storage. A potential merger with SpaceX may face slower review even if it proceeds.
Core growth drivers such as vehicle deliveries, energy deployments, and robotaxi rollout remain intact, yet the stock now carries a higher political-risk premium that could weigh on valuation until the company demonstrates workable relationships with the new Texas leadership and congressional majorities.
SpaceX ($SPCX)
SpaceX shares also declined in live trading on November 4 following the Democratic midterm sweep. The stock traded at $134.97, down 4.49 percent. The drop occurred even as broader indexes stabilized, highlighting a company-specific reaction to the election outcome.
Musk’s large contributions, concentrated in Texas races that both companies lost, place SpaceX’s Starbase launch facility and headquarters under a new Democratic governor.
At the federal level, Democratic control of Congress enables greater scrutiny of NASA, the Department of Defense, and other contracts that support a meaningful share of revenue, along with reviews of Starlink national-security uses and any Tesla merger. Analysts have noted that empowered committees can hold hearings and request documents on these relationships.
For SpaceX, the results raise the risk of delayed contract awards, higher compliance costs, and tighter constraints on AI and satellite infrastructure expansion, particularly in Texas where a data-center moratorium has been discussed.
A merger with Tesla could encounter political friction that slows integration of launch, connectivity, and autonomy capabilities.
While Starlink growth and launch cadence continue as primary drivers, the company faces a more contested path for federal funding and state-level operations, requiring management to rebuild ties with the new congressional majorities and Texas leadership to limit the overhang.
Elon Musk
Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit
Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.
Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.
Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.
Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.
The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”
Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”
The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.
Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.
Elon Musk
SpaceX President to gift Trump Accounts her SpaceX stock
Gwynne Shotwell’s 2 million SpaceX shares are headed to children’s Trump Accounts starting this December.
SpaceX President Gwynne Shotwell said Friday that more than 2 million SpaceX shares belonging to her and her husband, Robert, will be distributed to children’s Trump Accounts in December, turning a pledge she made over the summer into an actual transfer. “Robert and I are thrilled that our gift of over 2 million shares of SpaceX stock will be distributed to children’s Trump accounts in December!” Shotwell wrote on X, adding that the shares are “transferring to escrow as we speak.”
The first round goes to children aged 11 to 17 who live in ZIP codes where the median family income is $57,000 or less, along with kids in ZIP codes with too few residents for the Census to report that figure. Shotwell said those families should receive a notice by Monday, Reuters reported.
A second gift is expected to be finalized in the next few weeks. That round will cover eligible children in military families serving overseas, children in foster care, and more kids in Texas counties near the Shotwells’ home where median family income is $90,000 or less. Elon Musk replied to the announcement with “Cool” and a heart emoji.
Shotwell first announced the donation on July 6, less than a month after SpaceX priced its record IPO at $135 per share on the Nasdaq. IPO filings showed Shotwell owned about 12.6 million SpaceX shares, Quartz reported at the time, which makes the gift roughly one sixth of her stake. At the roughly $146 per share used to value Musk’s own pledge earlier this month, 2 million shares are worth about $290 million.
How the stock would actually reach the accounts had been an open question since July. Treasury guidance acknowledged that stock donations could flow into Trump Accounts, but it did not explain the mechanics for a program whose contributions default into an S&P 500 index fund. Shotwell thanked the Treasury, the IRS, the Dell Foundation, Greater Horizons, Invest America and the law firms Morgan Lewis and Gibson Dunn for “working over the past few months to make this happen.”
The transfer also works as a dry run for a far larger gift. On October 19, Musk said he would give one of his SpaceX shares to every kid in America next year and called it “the first of many.” With roughly 72 million children in the country, that pledge is worth about $10.5 billion. President Donald Trump thanked Musk the same day and said the shares would go through Trump Accounts, though neither SpaceX nor the Treasury has published how or when that distribution will happen.
Shotwell’s recipients also fill a gap in the program itself. Trump Accounts launched on July 4, and the $1,000 Treasury deposit only goes to babies born between 2025 and 2028. Teenagers aged 11 to 17 receive no government seed money, so for many of the families getting a notice on Monday, SpaceX stock will be the first asset in the account. The accounts convert into retirement accounts when the child turns 18.
SpaceX’s next Starship flight set to make history on Friday the 13th
EVgo taps Tesla Superchargers for mass charging expansion
