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Tesla’s aggressive pricing strategy was explained by Elon Musk last month

(Credit: Tesla)

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There’s no denying that Tesla’s new pricing strategy is aggressive. In recent days, the electric vehicle community has witnessed Tesla practically go for its competitors’ jugular by giving its current vehicle lineup significantly lower starting prices. This was quite evident with the Tesla Model Y, which received notable price reductions across the globe. 

While Tesla executives such as Tesla China VP Grace Tao have remarked that the company’s pricing strategies have so far not been driven by the momentum of competitors, it’s difficult to argue against the notion that the EV maker now has some legitimate rivals. This is especially the case in China, where companies like BYD are seemingly putting pressure on vehicles like the Tesla Model 3. 

Interestingly enough, Tesla CEO Elon Musk actually provided an early explanation about the company’s new pricing strategy last month. During an appearance at a Twitter Spaces session, Musk explained that he would like to push Tesla’s rapid growth even if it meant that the company’s profits would take a hit. The CEO noted that long term, such a strategy would likely be proven correct. 

“‘Do you want to grow unit volume, in which case, you have to adjust prices downward, or do you want to grow at a lower rate or go steady? That’s sort of the choice there. My inclination would be to still grow. My bias would be to say like, ‘Okay, let’s grow fast as we can without putting the company at risk,’ which would mean that in that scenario, profits would be low to negative during a recession. Provided the cash position is okay, I think that’s still the right move long term,” Musk said

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Elon Musk’s comments about Tesla’s cash position are quite notable. Over the years, Tesla has been growing its war chest, and during the third quarter of 2022, the company saw a $2.2 billion increase in its cash and marketable securities. With this amount added, Tesla’s cash and marketable securities reached $21.1 billion at the end of the third quarter. This was driven mainly by Tesla’s free cash flow of $3.3 billion, and offset partly by debt repayments of $900 million. 

More importantly, Tesla’s Q3 2022 Update Letter also highlighted that the company has “sufficient liquidity to fund our product roadmap, long-term capacity expansion plans, and other expenses.” This bodes well for Tesla in the coming years, especially considering the company’s increasingly ambitious goals, such as hitting 20 million vehicles per year by the end of the decade.

Elon Musk’s full Twitter Spaces session can be viewed here.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Elon Musk offers to pay TSA salaries as government shutdown leaves agents without paychecks

Elon Musk offered to personally cover TSA salaries as the DHS shutdown deepens travel chaos nationwide.

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Elon Musk says that he is willing to personally cover the salaries of Transportation Security Administration (TSA) workers caught in the crossfire of a partial government shutdown that has now dragged on for over a month. “I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country,” Musk wrote.


The offer arrives as Congress let funding expire for the Department of Homeland Security on February 14, amid a disagreement over immigration enforcement, leaving most TSA employees classified as essential and on duty but working without pay. The timing could not be more disruptive, as the shutdown is colliding directly with spring break travel season when millions of Americans are in the air.

This is not the first time TSA workers have endured this kind of hardship. TSA agents are being asked to work without pay until congressional action unblocks their paychecks, having previously held out through the longest government shutdown in U.S. history at 43 days. The pattern reveals a systemic failure in how Congress funds critical security infrastructure, and Musk’s offer shines a spotlight on that recurring failure at a moment when the public is directly feeling its effects through long lines and terminal closures.

Whether Musk can legally follow through remains unclear, as federal law generally prohibits government employees from receiving outside compensation related to their official duties.

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Elon Musk

Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry

Tesla, SpaceX, and xAI unveiled TERAFAB, a $25B chip factory targeting one terawatt of AI compute annually.

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Tesla TERAFAB Factory in Austin, Texas

Elon Musk took the stage over the weekend at the defunct Seaholm Power Plant in Austin, Texas, to officially unveil TERAFAB, a $20-25 billion joint venture between Tesla, SpaceX, and xAI that he described as “the most epic chip building exercise in history by far.” The announcement marks the most ambitious infrastructure bet Musk has made since Gigafactory 1 in Sparks, Nevada, and it fuses three of his companies into a single, vertically integrated AI hardware machine for the first time.

TERAFAB is designed to consolidate every stage of semiconductor production under one roof, including chip design, lithography, fabrication, memory production, advanced packaging, and testing.  At full capacity, the facility would scale to roughly 70% of the global output from the current world’s largest semiconductor foundry from Taiwan Semiconductor Manufacturing Company (TSMC).

Elon Musk’s stated goal is one terawatt of computing power annually, split between Tesla’s AI5 inference chips for vehicles and Optimus robots, and D3 chips built specifically for SpaceXAI’s orbital satellite constellation.

Tesla Terafab set for launch: Inside the $20B AI chip factory that will reshape the auto industry

The logic behind the merger of these three entities is rooted in a supply chain crisis Musk has been signaling for over a year. At Tesla’s Q4 2025 earnings call, he warned investors that external chip capacity from TSMC, Samsung, and Micron would hit a ceiling within three to four years. “We’re very grateful to our existing supply chain, to Samsung, TSMC, Micron and others,” Musk acknowledged at the Terafab event, “but there’s a maximum rate at which they’re comfortable expanding.” Building in-house was, in his framing, not a strategic option, but a necessity.

The space angle is where the announcement becomes genuinely unprecedented. Musk said 80% of Terafab’s compute output would be directed toward space-based orbital AI satellites, arguing that solar irradiance in space is roughly 5x greater than at Earth’s surface, and that heat rejection in vacuum makes thermal scaling viable. This directly feeds the SpaceXAI vision, which is betting that within two to three years, running AI workloads in orbit will be cheaper than doing so on the ground. The satellites, powered by constant solar energy, would effectively turn low Earth orbit into the world’s largest data center.

Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI

Historically, this announcement threads together every major Musk initiative of the past two years: the xAI-SpaceX merger, Tesla’s $2.9 billion solar equipment talks with Chinese suppliers, the 100 GW domestic solar manufacturing push, the Optimus humanoid robot program, and Starship’s development. TERAFAB is the capstone that ties them into a single coherent architecture — chips made on Earth, launched by SpaceX, powered by Tesla solar, run by xAI, and ultimately extended to the Moon.

“I want us to live long enough to see the mass driver on the moon, because that’s going to be incredibly epic,”Musk said during the presentation.

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Rolls-Royce makes shocking move on its EV future

When Rolls-Royce unveiled its first all-electric model, the Spectre, in 2022, former CEO Torsten Müller-Ötvös declared the brand would cease production of internal combustion engine vehicles by the end of the decade.

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Rolls Royce Wheels
Credit: BMW Group

Rolls-Royce made a shocking move on its EV future after planning to go all-electric by the end of the decade. Now, the company is tempering its expectations for electric vehicles, and its CEO is aiming to lean on its legacy of high-powered combustion engines to lead it into the future.

In a significant reversal, Rolls-Royce Motor Cars has scrapped its ambitious plan to become an all-electric manufacturer by 2030. The luxury British marque announced the decision amid sustained customer demand for traditional combustion engines and shifting regulatory landscapes.

When Rolls-Royce unveiled its first all-electric model, the Spectre, in 2022, former CEO Torsten Müller-Ötvös declared the brand would cease production of internal combustion engine vehicles by the end of the decade.

The move aligned with the industry’s broader push toward electrification, promising silent, effortless power befitting the “Rolls-Royce of cars.”

However, new CEO Chris Brownridge, who assumed the role in late 2023, has reversed course. “We can respond to our client demand … we build what is ordered,” Brownridge stated.

The company will continue offering its iconic V12 engines, which remain a cornerstone of its heritage and appeal to discerning buyers who appreciate the distinctive sound and character. He noted the original pledge was “right at the time,” but “the legislation has changed.”

While not abandoning electric vehicles entirely, the Spectre remains in production, with an electric Cullinan option forthcoming; the decision marks the end of a strict all-EV timeline. Relaxed emissions regulations and slowing EV demand, evidenced by a 47 percent drop in Spectre sales to 1,002 units in 2025, forced the reconsideration.

It was a sign that perhaps Rolls-Royce owners were not inclined to believe that the company’s all-EV future was the right move.

Rolls Royce customers want more EVs, says company CEO

Rolls-Royce joins a growing roster of automakers reevaluating aggressive electrification targets.

Fellow luxury brand Bentley has pushed its full electrification from 2030 to 2035, while continuing to offer hybrids and ICE models. Mercedes-Benz walked back its 2030 all-EV goal, now aiming for about 50% electrified sales while keeping combustion engines into the 2030s. Porsche has abandoned its 80% EV sales target by 2030, delaying models and extending hybrids.

Mainstream giants are following suit. Honda canceled its U.S. EV plans, including the 0-Series and Acura RSX, facing a $15.7 billion hit as it doubles down on hybrids. Ford and General Motors have incurred tens of billions in writedowns, canceling models and pivoting to hybrids amid an industry total exceeding $70 billion in charges.

This trend reflects a pragmatic shift driven by infrastructure gaps, consumer preferences, and policy changes. In the ultra-luxury segment, where emotional connection reigns, automakers are prioritizing flexibility over rigid deadlines, ensuring brands like Rolls-Royce evolve without alienating their core clientele.

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