Investor's Corner
Tesla’s CATL partnership in China is a strategic play that sets the stage for market domination
Tesla’s deal with battery supplier Contemporary Amperex Technology Co Ltd (CATL) for its Made-in-China Model 3 is a strategic move that will deepen the company’s roots in the world’s largest automotive market.
CATL is expected to supply a “zero cobalt” prismatic lithium iron phosphate (LFP) batteries that the carmaker would use in its Model 3 sedan for the domestic market.
Reduce Battery Costs While Doing Good
The LFP batteries are expected to be cheaper by a “double-digit percent” compared to the existing batteries Tesla is using for its locally-produced Model 3. Benchmark Mineral Intelligence, a price reporting agency that specializes in lithium-ion batteries for EVs, estimates that Tesla will save more than 25% in cost compared to what the carmaker spends for batteries used for Model 3s in the United States.
Tesla uses cylindrical nickel-cobalt-aluminum (NCA) batteries for its vehicles which typically have lower cobalt content than industry-popular nickel-cobalt-aluminum (NCM) batteries used by other electric vehicle manufacturers. However, as the world begins to better understand the human toll for cobalt mining, Tesla CEO Elon Musk has expressed his intentions to cut cobalt-use in Tesla batteries. Thereby paving the way for a partnership with a battery cell manufacturer that has a zero to limited-need for cobalt – CATL.
We use less than 3% cobalt in our batteries & will use none in next gen
— Elon Musk (@elonmusk) June 13, 2018
CATL will use its cell-to-pack (CTP) technology to improve the energy density and safety of the zero-cobalt batteries. Using the technology that involves more than 70 core patents, CATL can up the mass-energy density of the LFP batteries by 10 to 15 percent, reduce the number of parts of battery packs by around 40 percent, and improve volume utilization efficiency by 15 to 20 percent. The battery manufacturer also claims that it is taking steps to increase the energy density of its LPF batteries using CTP technology by 2024.
All of these factors make the equation a win-win for Tesla. Aside from the cost savings, the zero-cobalt batteries for the China Model 3 may also help improve the production process and help Giga Shanghai hit a 3,000 units per week run rate, consistently. Plus, Tesla’s partnership with a Chinese supplier can only help further improve its relationship with the government that has welcomed it with open arms.
Small Step To Reduce Cost, Big Step To Conquer China
Tesla’s Giga Shanghai has so far been impressive. The first vehicle production plant for Tesla outside of the US is practically a miracle by all standards. The facility was built from the ground up and it churned out its first locally-made Model 3s after 10 months.
It also makes sense to set up a car factory in the biggest automotive market in the world that brought roughly $3 billion in revenues to Tesla’s coffers in 2019 and positioned Tesla to conquer China.
“I feel there is a pretty big fundamental efficiency gain that Tesla has by just making cars, especially affordable cars than 3 and Y, at least on the continent where the customers are. what we’re doing — or have been doing in the past was really pretty silly in making cars in California and then shipping them halfway around the world…,” Musk said during the Q4 2019 earnings call.
With the CATL zero-cobalt batteries for MIC Model 3s, Tesla further localizes its supply chain in China. With localization, analysts believe that the China-made Model 3 can practically be a cash cow for Tesla.
A partnership with CATL can also put Tesla on a path to achieving higher profit margins for the China Model 3 while still being able to lower the price of its vehicles, thereby stimulating local demand even more.
According to Tesla CFO Zachary Kirkhorn, the margins coming out of Giga Shanghai is expected to match that of vehicles coming out of Fremont. “And so if you add all of this up, our internal estimates are a pretty significant reduction in the cost of Model 3 in China relative to Fremont, but I think it’s also important to keep in mind that the cost of the Standard Plus that we’re selling out of Shanghai is also lower than that of the similar car coming out of Fremont from price perspective. And so and I’ve said this on previous earnings calls, I think it’s fair to expect the margin coming out of the Shanghai facility to match the same margin for the vehicle in Fremont,” noted Kirkhorn in Tesla’s Q4 earnings call.
With Tesla’s MIC Model 3 as an electric car for the masses, Elon Musk and his car brand can help change China. The government sees Tesla as a catalyst for its slumping automotive industry and a spark to help transition the wider population from internal combustion engines to electric vehicles, which in turn can help combat air pollution that causes over 1 million deaths per year in the country and costing its economy roughly $40 billion annually.
The zero-cobalt batteries by the CATL for the China Tesla Model 3 might be one of the essential ingredients to further help TSLA skyrocket and drive the brand to consistent profitability.
Elon Musk
SpaceX just filed for the IPO everyone was waiting for
SpaceX filed its public S-1, revealing $18.7 billion in revenue and billions in losses.
SpaceX publicly filed its S-1 registration statement with the Securities and Exchange Commission on May 20, 2026, making its financial details available to the public for the first time ahead of what could be the largest IPO in history.
An S-1 is the formal document a company must submit to the SEC before going public. It includes audited financials, risk factors, business descriptions, and how the company plans to use the money it raises. Companies are required to file one before selling shares to the public, and it must be published at least 15 days before the investor roadshow begins. SpaceX had already submitted a confidential draft to the SEC in April, which allowed regulators to review the filing privately before it went public.
The S-1 reveals that SpaceX generated $18.7 billion in consolidated revenue in 2025, driven largely by its Starlink satellite internet division, which posted $11.4 billion in revenue, growing nearly 50% year over year. Despite that growth, the company lost about $4.9 billion in 2025 and has burned through more than $37 billion since its founding.
SpaceX just forced Verizon, AT&T and T-Mobile to team up for the first time in history
A significant portion of those losses trace back to xAI, Elon Musk’s artificial intelligence company, which was recently merged into SpaceX. SpaceX directed roughly 60% of its capital spending in 2025 to its AI division, totaling around $20 billion, yet that division lost billions and grew revenue by only about 22%.
SpaceX plans to list its Class A common stock on Nasdaq under the ticker SPCX, with Goldman Sachs, Morgan Stanley, and Bank of America leading the offering. The dual-class share structure means going public will not meaningfully reduce Musk’s control, as Class B shares he holds carry 10 votes per share compared to one vote for public Class A shares.
The company is targeting a raise of around $75 billion at a valuation of roughly $1.75 trillion, which would make it the largest IPO ever. The investor roadshow is reportedly planned for June 5.
Elon Musk
Tesla ditches India after years of broken promises
Tesla has ditched its plans to build a factory in India after years of failed negotiations.
Tesla’s long-running effort to establish a manufacturing presence in India is officially over. India’s Minister of Heavy Industries H.D. Kumaraswamy confirmed on May 19, 2026 that Tesla has informed authorities it will not proceed with a manufacturing facility in the country.
Tesla first signaled serious interest in India around 2021, when it began hiring local staff and lobbying the Indian government for lower import tariffs. The ask was straightforward: reduce duties enough for Tesla to test the market with imported vehicles before committing capital to a local factory. India’s position was equally firm, with an ask of Tesla to commit to manufacturing first, then receive tariff relief. Neither side moved, and the talks quietly collapsed.
Tesla to open first India experience center in Mumbai on July 15
India had offered a policy that would reduce import duties from 110% down to 15% on EVs priced above $35,000, provided companies committed at least $500 million toward local manufacturing investment within three years. Tesla declined to participate. The tariff standoff was only part of the problem. Analysts pointed to significant gaps in India’s local supply chain, inadequate industrial infrastructure, and a mismatch between Tesla’s premium pricing and the purchasing power of India’s automotive market as additional factors that made the investment difficult to justify.
First signs of an unraveling relationship came in April 2024, when Musk abruptly cancelled a planned trip to India where he was set to meet Prime Minister Modi and announce Tesla’s market entry. By July 2024, Fortune reported that Tesla executives had stopped contacting Indian government officials entirely. The government at that point understood Tesla had capital constraints and no plans to invest.
The more fundamental issue is that Tesla’s existing factories are currently operating at approximately 60% capacity, making a commitment to building new manufacturing capacity in a new market difficult to defend to investors. Tesla will continue selling imported Model Y vehicles through its existing showrooms in Mumbai, Delhi, Gurugram, and Bengaluru, but local production is no longer part of the plan.
Elon Musk
SpaceX just forced Verizon, AT&T and T-Mobile to team up for the first time in history
AT&T, T-Mobile, and Verizon just joined forces for one reason: Starlink is winning.
America’s three largest wireless carriers, AT&T, T-Mobile, and Verizon, announced on On May 14, 2026 that they had agreed in principle to form a joint venture aimed at pooling their spectrum resources to expand satellite-based direct-to-device (D2D) connectivity across the United States in what can be seen as a direct response to SpaceX’s Starlink initiative. D2D, in plain terms, is technology that lets a standard smartphone connect directly to a satellite in orbit, the same way it connects to a cell tower, with no extra hardware required.
The alliance is widely seen as a means to slow Starlink’s rapid expansion in the satellite internet and mobile markets. SpaceX’s Starlink Mobile service launched commercially in July 2025 through a partnership with T-Mobile, starting with messaging before expanding to broadband data. SpaceX secured access to valuable wireless spectrum through its $17 billion deal with EchoStar, paving the way for significantly faster satellite-to-phone speeds.
SpaceX was not shy about its reaction. SpaceX president and COO Gwynne Shotwell responded on X: “Weeeelllll, I guess Starlink Mobile is doing something right! It’s David and Goliath (X3) all over again — I’m bettin’ on David.” SpaceX’s VP of Satellite Policy David Goldman went further, flagging potential antitrust concerns and asking whether the DOJ would even allow three dominant competitors to coordinate in a market where a new rival is actively entering.
Weeeelllll, I guess @Starlink Mobile is doing something right! It’s David and Goliath (X3) all over again — I’m bettin’ on David 🙂 https://t.co/5GzS752mxL
— Gwynne Shotwell (@Gwynne_Shotwell) May 14, 2026
Financial analysts at LightShed Partners were blunt, saying the announcement showed the three carriers are “nervous,” and pointed to the timing: “You announce an agreement in principle when the point is the announcement, not the deal. The timing, weeks ahead of the SpaceX roadshow, was the point.”
As Teslarati reported, SpaceX’s next generation Starlink V2 satellites will deliver up to 100 times the data density of the current system, with custom silicon and phased array antennas enabling around 20 times the throughput of the first generation. The carriers’ JV, which has no definitive agreement, no financial structure, and no deployment timeline yet, will need to move quickly to matter.
Elon Musk’s SpaceX is targeting a Nasdaq listing as early as June 12, aiming for what would be the largest IPO in history. With Starlink now serving over 9 million subscribers across 155 countries, holding 59 carrier partnerships globally, and now powering Air Force One, the carriers’ joint venture announcement landed at exactly the wrong time to look like anything other than a defensive move.
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