Tesla’s unique business model allows them to sell vehicles directly to consumers through both retail locations and Tesla’s online design studio. Direct-to-consumer sales of its vehicles have led to some turbulence with existing car dealerships in many states, including Utah, Louisiana, Connecticut, Texas and Michigan. New Jersey allowed Tesla to open direct sales in the state in 2015, but with conditions. New Jersey’s legislation limited the number of direct-to-consumer dealerships per manufacturer to four stores and required at least one service center in the state. Tesla CEO Elon Musk once compared local car dealers to a mafia protection racket, stating in a Tesla blog post, “The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures ‘consumer protection’…Unless they are referring to the mafia version of ‘protection’, this is obviously untrue.”
Tesla recently launched a lawsuit to overturn a sales ban put into effect in Michigan in 2014 that prevents the Elon Musk-led electric carmaker from selling directly to consumers within the state. The greatest opposition against Tesla’s plea for direct sales in Michigan comes from both auto dealers and manufacturers, who argue that Tesla disrupts the traditional franchise dealership model.
Courtesy of Teslanomics.co
Ironically, Michigan and Texas which bans Tesla’s direct sales model have public pensions that are significant investors in the Silicon Valley company. However, that isn’t the only financial interest states have in Tesla. All states in the US rely heavily on sales tax to generate revenue. States without stores are forcing owners to purchase and service their vehicles out-of-state, missing out on sales tax in the process, a major revenue loss.
Source: Bloomberg, September 2016
Bill Wolters, of the Texas Automobile Dealers Association, is claiming that the introduction of Tesla into the Texas car market would “reduce competition”, and will incur costs for Texas. However, this argument assumes that dealers are creating added value for their consumers, and if that argument holds, then dealers should be able to keep customers in the market after Tesla enters. Additionally, Tesla is competing against other manufacturers and not franchises.
Racecar driver and environmental activist Leilani Munter protest’s North Carolina’s ban on Tesla’s direct sales model (Photo: Medium/Leilani Munter)
Out of a presumed 400,000 reservations for the Tesla Model 3, it is estimated that roughly half originate from the United States, according to the distribution of early Model 3 reservation data from Model3Tracker.info. Using a loosely estimated assumption of Tesla Model 3 reservations originating from banned states via Model3.ocasual.com, we get the following numbers: 1,250 in Louisiana, 2,980 in Connecticut, 3,076 in Utah, 15,670 in Texas, and 4,230 in Michigan.
The sales tax for Michigan is 6%, Louisiana is 9%, Connecticut is 6.35%, Utah is 4.7%, and Texas is 6.25%
This equates to a loss of $8,883,000 for Michigan, $3,937,500 for Louisiana, $34,278,125 for Texas, $6,623,050 for Connecticut, and $5,060,020 for Utah. That’s a total of $59,791,695 in loss revenue, which does not factor in current sales of Model S and Model X.
| States with Tesla Ban | Sales Tax | Estimated Tesla Model 3 Reservations | Projected state revenue loss (in dollars) |
| Louisiana | 9% | 1250 | $3,937,500 |
| Texas | 6.25% | 15670 | $34,278,125 |
| Michigan | 6% | 4230 | $8,883,000 |
| Connecticut | 6.35% | 2980 | $6,623,050 |
| Utah | 4.70% | 3076 | $5,060,020 |
Navigant Research believes that sales electric vehicles, including hybrid/plug-in hybrid, are set to comprise 9 percent of total vehicle sale by 2025. Currently, EVs make up 3% of total vehicle sales, but the number in 2016 saw a 36 percent increase in sales in the US alone. In 2016, 4,500 EVs were sold in Texas, 2,470 in Michigan, 270 in Louisiana, 1,452 in Connecticut, 1,132 in Utah, and 70 in West Virginia. Texas, Connecticut, and Michigan ranked among states with some of the highest EV sales. Of electric vehicles sold total in 2016, the Tesla Model S was the leading electric vehicle with ringing in at 29,156 vehicles. The Tesla Model S also outsold its entire class of vehicles, combined. Tesla is expecting high demand for Model 3, which will start at roughly half the cost of the Model S.
Source: Topspeed.com
There are currently 223,319 estimated Model 3 reservations in the United States, far greater than the sales of comparable vehicles. The BMW 3 and 4 series which sold around 106,000 vehicles in 2016 and the Mercedes C-Class sold around 77,000 vehicles in 2016. Tesla CEO Elon Musk is expecting to produce 500,000 vehicles in 2018 and tens of thousands this year (Tesla hasn’t released Model 3 production guidance for 2017). Musk’s expectations could make the Model 3 the highest selling vehicle in its class in both 2017 and 2018. The states that ban Tesla dealerships not only miss out on sales tax revenue from Tesla vehicles but in turn create an inconvenience for residents. By instating a direct sales ban on Tesla before the launch of Tesla Model 3, states will not only lose millions of dollars in sales revenue per year but also interfere with and disrupt free market competition and consumer activities.
Feature image courtesy of Delanman via Twitter.
News
Tesla Semi is already winning over truck drivers
The consensus among participants is clear: the Semi feels quieter, quicker, and far less physically demanding than diesel rigs while delivering three times the power and dramatically lower operating costs.
Tesla’s all-electric Semi is proving more than just a flashy concept as it is winning converts among the professionals who know trucks best.
As fleets roll out Pilot Programs for Tesla across North America, drivers are raving about the Class 8 electric truck’s unique features, including a centered driver’s seat, massive touchscreen visibility, instant torque, and absence of gear-shifting fatigue.
These features are transforming long days behind the wheel into noticeably easier, less stressful shifts.
Tesla Semi pricing revealed after company uncovers trim levels
In a recent Wall Street Journal profile of early pilots, Dakota Shearer of IMC Logistics described backing out of a tight spot he had mistakenly entered:
“I backed right out of there, no problem. It’s like I’d never done it in the first place. That right there showed me that the technology the Tesla has makes a big difference.”
His colleague Angel Rodriguez of Hight Logistics, who switched from a 13-speed diesel, agreed:
“It’s just easier on your body. It’s less stressful because you’re not really having to engage the clutch and the stick shift.”
Veteran drivers in other tests echo the same enthusiasm. Tom Sterba, a Senior Driver at Saia, spent days testing the Semi and came away impressed with the navigation and overall feel:
“The navigation systems in these trucks are just unbelievable. That’s what I love about it.”
Sterba summed up the experience with a line that has since gone viral among trucking circles:
“I hope I retire in this truck.”
Pilot programs with ArcBest, thyssenkrupp Supply Chain Services, and Mone Transport delivered similar feedback. Drivers consistently praised the center-seat layout for eliminating blind spots, the smooth acceleration, and the overall comfort and safety.
Real-world data backed the hype, as ArcBest logged thousands of miles at efficient consumption rates, even over the challenging routes, like Donner Pass, while other fleets beat Tesla’s own efficiency targets.
The consensus among participants is clear: the Semi feels quieter, quicker, and far less physically demanding than diesel rigs while delivering three times the power and dramatically lower operating costs.
The latest chapter in the Semi’s story arrived just days ago on Jay Leno’s Garage, as Leno became the first outsider to drive the updated long-range production model, joined by Tesla Chief Designer Franz von Holzhausen, and Semi Program Director Dan Priestley.
Tesla reveals various improvements to the Semi in new piece with Jay Leno
The episode revealed major upgrades heading to volume production this year: the truck sheds roughly 1,000 pounds, adopts a 48-volt architecture, switches to fully electric steering with Cybertruck-derived actuators, and uses 4680 battery cells engineered for an over-one-million-mile lifespan.
Aerodynamics improved, enabling a 500-mile range on the long-haul version, and about 325 miles on the shorter-wheelbase standard-range model. Megachargers can now deliver up to 1.2 megawatts, adding roughly 300 miles in about 30 minutes.
Leno hauled heavy loads and marveled at the turning radius and effortless power delivery. “I don’t feel like I’m pulling anything,” he said during the episode.
With hundreds of Semis already accumulating over 13.5 million fleet miles and high uptime, the future of heavy-duty trucking looks electric. Drivers are giving raving reviews, and they’re ready to climb aboard the electric trucking industry for good.
Investor's Corner
Tesla and SpaceX to merge in 2027, Wall Street analyst predicts
The move, Ives argues, is no longer a distant possibility but a logical next step, fueled by deepening operational ties, shared AI ambitions, and Elon Musk’s vision for dominating the next era of technology.
Tesla and SpaceX are two of Elon Musk’s most popular and notable companies, but a new note from one Wall Street analyst claims the two companies will become one sometime next year, as 2027 could see the dawn of a new horizon.
In a bold new research note, Wedbush analyst Dan Ives has reaffirmed his long-standing prediction: Tesla and SpaceX will merge in 2027.
The move, Ives argues, is no longer a distant possibility but a logical next step, fueled by deepening operational ties, shared AI ambitions, and Elon Musk’s vision for dominating the next era of technology.
He writes:
“Still Expect Tesla and SpaceX to Merge in 2027. We continue to believe that SpaceX and Tesla will eventually merge into one company in 2027 with the groundwork already in place for both operations to become one organization. Tesla already owns a stake in SpaceX after the company’s $2 billion investment in xAI got converted to SpaceX shares following SpaceX’s acquisition of xAI earlier this year initially tying both of Musk’s ventures closer together but still represents <1% of SpaceX’s expected valuation. The recent announcement of a joint Terafab facility between SpaceX and Tesla further ties both operations together making it more feasible to merge operations given the now existing overlap being built out across the two with this the first step.”
The groundwork is already being laid. Earlier this year, SpaceX acquired xAI, converting Tesla’s $2 billion investment in the AI startup into a small equity stake, less than 1 percent, in SpaceX.
Regulatory filings cleared the transaction in March 2026, formally linking the two Musk-led companies financially for the first time. Then came the announcement of a joint TERAFAB facility in Austin, Texas: two advanced chip factories, one dedicated to Tesla’s AI needs for vehicles and Optimus robots, the other targeting space-based data centers.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
Ives calls Terafab the “first step” toward full operational integration.
SpaceX’s impending IPO, expected as soon as mid-June 2026, will turbocharge these plans. The company aims to raise approximately $75 billion at a roughly $1.75 trillion valuation, far exceeding earlier estimates.
Proceeds will fund Starship rocket flights, a NASA-contracted lunar base, expanded Starlink services across maritime, aviation, and direct-to-mobile applications, and crucially, orbital AI infrastructure
A major driver is the exploding demand for AI compute. U.S. data centers are projected to consume 470 TWh of electricity by 2030, constrained by power grids and land.
🚨 Wedbush’s Dan Ives says that Tesla and SpaceX will merge in 2027. SpaceX will IPO soon, his new note says:
“According to media reports, SpaceX could file a prospectus for an IPO imminently with the goal of raising ~$75 billion above the prior expectation of ~$50 billion…
— TESLARATI (@Teslarati) March 27, 2026
SpaceX’s strategy, launching millions of solar-powered satellites to host data centers in orbit, bypasses Earth’s energy bottlenecks. Solar energy captured in space avoids atmospheric losses and day-night cycles, offering a scalable solution for AI training and inference.
The xAI acquisition ties directly into this vision, positioning the combined entity as a leader in extraterrestrial computing.
The merger would create a formidable conglomerate spanning electric vehicles, robotics, satellite communications, human spaceflight, and defense.
Ives highlights SpaceX’s role in the Trump administration’s “Golden Dome” missile defense shield, which would leverage Starlink satellites for tracking.
For Tesla, access to SpaceX’s launch cadence and orbital assets could accelerate autonomous driving, Robotaxi fleets, and Optimus deployment.
Musk, who has signaled his desire to own roughly 25 percent of Tesla to steer its AI future, views the combination as essential to overcoming fragmented regulatory scrutiny from the FTC and DOJ.
Challenges remain. Antitrust hurdles could delay or reshape the deal, and shareholder approvals on both sides would be required. Yet Ives remains bullish, maintaining an Outperform rating on Tesla with a $600 price target, implying substantial upside from current levels. The analyst sees the merger as the “holy grail” for consolidating Musk’s disruptive tech empire.
If realized, a 2027 Tesla-SpaceX union would not only reshape corporate boundaries but redefine humanity’s trajectory in AI and space exploration. It would mark the moment two pioneering companies become one unstoppable force, pushing the limits of what’s possible on Earth and beyond.
News
Tesla ‘Killer’ heads to the graveyard as AFEELA taps out
SHM has officially discontinued development of its highly anticipated AFEELA electric vehicles. On March 25, the joint venture between Sony and Honda announced it would halt the AFEELA 1 luxury sedan and a planned SUV model.
There have been many Tesla “Killers” over the years, all of which have either failed to dethrone the automaker from its dominance in the United States, or even make it to the market altogether.
The Sony Honda Mobility (SHM) project, known as AFEELA, is the latest to make it to the grave, as the company announced its intentions to abandon the project earlier this week, Bloomberg reported.
SHM has officially discontinued development of its highly anticipated AFEELA electric vehicles. On March 25, the joint venture between Sony and Honda announced it would halt the AFEELA 1 luxury sedan and a planned SUV model.
🚗 Tesla Killers Graveyard:
Sony-Honda AFEELA
The sleek, AI-packed luxury sedan with PlayStation integration. Officially cancelled in March 2026 after Honda scaled back its EV plans.Fisker Ocean
Stylish SUV with solar roof promises. Company filed for bankruptcy in 2024 amid… https://t.co/Om14UhISOy— TESLARATI (@Teslarati) March 26, 2026
The decision follows Honda’s March 12 reassessment of its electrification strategy, which scrapped several upcoming EV programs amid slowing demand, high costs, and shifting market conditions.
SHM stated that it could no longer rely on key Honda technologies and manufacturing assets, leaving “no viable path forward.” Reservation fees for early buyers in California are being fully refunded, and the joint venture’s future is now under review.
Launched with fanfare in 2022, the AFEELA was positioned as a tech-forward premium EV blending Honda’s engineering reliability with Sony’s entertainment and AI expertise.
Prototypes featured advanced autonomous driving systems, immersive in-cabin displays, and even PlayStation integration, earning it early media labels as a potential “Tesla Killer.”
Priced around $90,000, the sedan was slated for limited production at Honda’s Ohio plant with deliveries targeted for late 2026. Industry watchers saw it as a serious challenger to Tesla’s dominance in software, connectivity, and premium appeal.
Yet, like many ambitious EV projects, it fell victim to broader industry headwinds: softening consumer demand, persistent high interest rates, and intense competition from established players.
The AFEELA joins a long list of vehicles once hyped as “Tesla Killers” that failed to deliver. In the late 2010s, Fisker’s second act, the Ocean SUV, promised stylish design and solid-state battery tech but collapsed into bankruptcy in 2024 after production delays, quality issues, and financial shortfalls.
Faraday Future poured billions into the FF 91 luxury sedan, touting it as a hyper-tech rival with unmatched performance and features; the company delivered fewer than 100 vehicles before fading into obscurity.
Lordstown Motors’ Endurance electric pickup generated massive pre-order buzz and Wall Street excitement but imploded after exaggerated range claims, a factory sale, and eventual bankruptcy.
Even Lucid Motors’ Air sedan, frequently called a Tesla slayer for its superior range and luxury, has struggled with sluggish sales and missed growth targets despite strong reviews.
Rivian’s R1T and R1S trucks enjoyed similar early acclaim and a blockbuster IPO, yet production ramp-up challenges and profitability woes have prevented it from dethroning Tesla.
The AFEELA’s quiet demise underscores a harsh reality in the EV sector. While Tesla’s first-mover advantage in software, charging infrastructure, and brand loyalty remains formidable, legacy automakers and tech newcomers alike continue to underestimate the complexities of scaling affordable, desirable electric vehicles.
As market realities force tough choices, the graveyard of “Tesla Killers” grows longer, another reminder that innovation alone is rarely enough to topple an established leader.
Tesla Semi is already winning over truck drivers
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Tesla lands on Fortune’s 2026 Most Innovative Companies and the Cybercab is why
Elon Musk says Tesla is developing a new vehicle: ‘Way cooler than a minivan’
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
