Investor's Corner
NIO’s new Formula E race car represents a turning point for the EV industry
At a flashy unveiling in East London on Monday night, NIO, the Chinese-based electric vehicle startup, unveiled their Gen2 Formula E car for Season 5 of the all-electric racing series. The extravagant fanfare wasn’t unwarranted, as the new car marks a historic point for the Formula E racing series and, more broadly, electric cars in general.
Up until this point, Formula E has been an exciting sporting event that, despite its best efforts, has struggled to overcome one of the longtime disadvantages of electric vehicles: range. This season, range anxiety is taking a back seat as battery improvements move the series forward. Advancements in the battery cells and the overall pack technology have allowed the cars to run the entire 45-minute race on a single charge. In prior seasons, each driver swapped into a second fully charged vehicle mid-race. The battery capacity has doubled, from 26 kWh to 54 kWh, while maintaining nearly the same size and weight.
The new vehicles will not only aide in the teams’ performance on the track but will also serve as a testbed for NIO’s most advanced technologies. “We are working on the cutting edge, whatever we learn here, may go down into the NIO production cars. Currently, the components we use are too expensive, but that’s a matter of time. The actual software that we use to program the inverter and everything that can all be used in the future,” said Paul Fickers, Performance Program Engineering Director at NIO.
The new technological advancements signify a much larger change in the entire EV industry: the impending dominance over internal-combustion engines. Allowing companies to go head-to-head, on a technological and skill-based level, by leaving range concerns behind and upping the maximum power output in the cars, will heat up competition between the teams to a truly exciting level.
With nearly all the teams entering or nearing production of their own electric roadcars, Season 5 of Formula E will be the most important yet. NIO began production of their first vehicle earlier this year in China, Audi announcing the e-Tron, Jaguar’s brand new i-Pace, Nissan’s long-time Leaf, and BMW’s i-Series. NIO’s Fickers told Teslarati that he especially believes NIO’s motor and inverter will best the competition.
Outside of technological changes to the vehicles, NIO is switching up their driver roster by adding Tom Dillmann to the team, joining long-time NIO driver, Oliver Turvey. Dillmann tells Teslarati that the driving experience of a Formula E vehicle is like no other, “I don’t compare it to a normal single seater, I just see it as Formula E. It is 900kg, it has a driver, this amount of power, different tires. Formula E for me is separate.”
Dillmann also highlighted the increased power on the new generation vehicle, with peak power rising from 200 kW to 250 kW. “On the tracks we are racing on, very narrow, twisty, it’s fast,” Dillmann noted, going on to state the power capacity boost will be especially noticeable in the qualifying races (when speed is the number one objective), “it’s going to be fast.”
In addition to a new vehicle and driver, NIO added Switzerland-based, cybersecurity firm Acronis as a long-term partner. The company will also be providing NIO with technology services.
In September, NIO listed on the New York Stock Exchange and became the second all-electric automaker to go public, after Tesla in 2010. With over 6,000 employees across the world, NIO is making a large bet on the world’s largest electric vehicle market in China.
-
While the Formula E races do help the company’s branding, they are looking to eventually bring the cutting-edge technology into their production vehicles, the NIO ES8 and ES6 (both crossovers). The vehicles have prices ranging from $55,000-$65,000, far less than Tesla’s Model X, which costs more than double that in China.
While only time will tell if NIO can meet their sales targets in China, we will be able to see NIO’s racing technology in action shortly. Formula E’s first race of Season 5 is being held in Ad Diriyah, Saudi Arabia on December 15th. With larger batteries and more powerful motors, the new season will surely be the most exciting yet.
Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
-
None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
-
Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
-
High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
-
Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla launches V2L Outlet Adapter for Premium Model Y in the U.S.
Tesla Roadster unveiling nears, and it will fly: The Information
