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Tesla’s next vehicles have the potential to usher in the extinction of gas cars
During the second quarter earnings call, Elon Musk tentatively confirmed that Tesla would be making a compact car and a vehicle with high capacity. Granted, it would probably take a few more years before such vehicles are produced, but one thing seems certain. Considering Tesla’s speed and pace, it would not be surprising if Tesla’s compact car and high capacity EV causes the extinction of the internal combustion engine.
Tesla’s current lineup of vehicles, which comprise the Model S, Model 3, Model X, and Model Y, are great EVs, but they are still fairly large for their class. This includes the Model 3 and the Model Y, Tesla’s “smaller” vehicles in its lineup. This, together with the vehicles’ premium price, end up blocking the company from reaching its full potential in the auto market. With a compact car and a high capacity vehicle, however, things could drastically change for Tesla.
Compact and High Capacity EVs
Tesla has mentioned the creation of a smaller car in the past, and more recently, the company has tapped into China’s creative minds for help in designing its compact car. This vehicle is expected to be designed and manufactured in China, but the opportunities for such a car go far beyond the country. Compact cars have a dedicated following, after all, and for good reason.
A higher capacity vehicle is also a key part of the mass market puzzle that Tesla could tap into. Higher capacity vehicles could come in many forms, like vans that could either transport people or cargo. Fellow EV maker Rivian is already involved in the development of electric vans, thanks to its partnership with Amazon. It would then not be surprising if Tesla also dips its feet in the development of its a similar line of vehicles, especially those that it could use for its own operations.
Opportunities in Developing Countries
Tesla’s current S,3,X,Y lineup are still premium cars through and through, and one thing that they cannot do is compete in a market that prioritizes cost. These markets, such as India and other southeast Asian nations, actually hold a lot of potential for the company. However, for Tesla to enter and compete in these regions, it would have to learn how to play the affordability and practicality balancing game.
Vehicles that thrive in the compact car segment usually offer the best performance and features within a limited price range. The Honda Fit/Jazz (or at least its initial iteration) is a good example of this, as the vehicle was affordable, practical, and still fairly fun to drive. If Tesla could create a vehicle that’s far more affordable than the Model 3 (perhaps in the $20,000 range), then the company could tap into a segment that is, at least for now, still dominated by legacy auto.
The same is true for high capacity vehicles. There is a reason why the compact MPV (multi purpose vehicle) segment exists, after all. MPVs are low cost, relatively bare bones vehicles that are designed to carry as many people or cargo at the lowest price possible. This usually results in vehicles that are not optimized for performance, with small engines and high seating capacity (think a 1.5 liter engine with seven seats). The Toyota Kijang, an example of this type of vehicle, has been around for decades, and for good reason. It simply has a very stable following.
The Tesla Effect and the Extinction of ICE
Interestingly enough, Tesla is already in the process of lowering its production and battery costs. This is one of the reasons why the company has been aggressively acquiring companies that are working on bleeding edge battery tech. Elon Musk is aware of this, as he noted during the recently held earnings call.
“It is important to make the car affordable. We will not succeed in our mission if we do not make cars affordable. Like the thing that bugs me the most about where we are right now is that our cars are not affordable enough. We need to fix that,” Musk said.
Fortunately for Tesla, it has now reached a point where the company is now being emulated by the legacy automakers in an attempt to catch up in the EV transition. The transition to electric cars is pretty much undeniable at this point, so it is now up to Tesla to set the pace. With this “Tesla Effect” in mind, it would be best if the electric car maker could expedite its expansion into other vehicle segments as soon as possible. Doing so would allow the company to accelerate the transition to sustainability.
After all, with vehicles that start at around $20,000 and with high capacity EVs that can transport numerous passengers, there will be very little reason for customers to buy a gas powered vehicle anymore. By taking on and competing in the compact and high capacity segment, Tesla could, effectively, usher in the extinction of the internal combustion engine.
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Tesla aims to combat common Full Self-Driving problem with new patent
Tesla writes in the patent that its autonomous and semi-autonomous vehicles are heavily reliant on camera systems to navigate and interact with their environment.
Tesla is aiming to combat a common Full Self-Driving problem with a new patent.
One issue with Tesla’s vision-based approach is that sunlight glare can become a troublesome element of everyday travel. Full Self-Driving is certainly an amazing technology, but there are still things Tesla is aiming to figure out with its development.
Unfortunately, it is extremely difficult to get around this issue, and even humans need ways to combat it when they’re driving, as we commonly use sunglasses or sun visors to give us better visibility.
Cameras obviously do not have these ways to fight sunglare, but a new patent Tesla recently had published aims to fight this through a “glare shield.”
Tesla writes in the patent that its autonomous and semi-autonomous vehicles are heavily reliant on camera systems to navigate and interact with their environment.
The ability to see surroundings is crucial for accurate performance, and glare is one element of interference that has yet to be confronted.
Tesla described the patent, which will utilize “a textured surface composed of an array of micro-cones, or cone-shaped formations, which serve to scatter incident light in various directions, thereby reducing glare and improving camera vision.”
The patent was first spotted by Not a Tesla App.
The design of the micro-cones is the first element of the puzzle to fight the excess glare. The patent says they are “optimized in size, angle, and orientation to minimize Total Hemispherical Reflectance (THR) and reflection penalty, enhancing the camera’s ability to accurately interpret visual data.”
Additionally, there is an electromechanical system for dynamic orientation adjustment, which will allow the micro-cones to move based on the angle of external light sources.
This is not the only thing Tesla is mulling to resolve issues with sunlight glare, as it has also worked on two other ways to combat the problem. One thing the company has discussed is a direct photon count.
CEO Elon Musk said during the Q2 Earnings Call:
“We use an approach which is direct photon count. When you see a processed image, so the image that goes from the sort of photon counter — the silicon photon counter — that then goes through a digital signal processor or image signal processor, that’s normally what happens. And then the image that you see looks all washed out, because if you point the camera at the sun, the post-processing of the photon counting washes things out.”
Future Hardware iterations, like Hardware 5 and Hardware 6, could also integrate better solutions for the sunglare issue, such as neutral density filters or heated lenses, aiming to solve glare more effectively.
Elon Musk
Delaware Supreme Court reinstates Elon Musk’s 2018 Tesla CEO pay package
The unanimous decision criticized the prior total rescission as “improper and inequitable,” arguing that it left Musk uncompensated for six years of transformative leadership at Tesla.
The Delaware Supreme Court has overturned a lower court ruling, reinstating Elon Musk’s 2018 compensation package originally valued at $56 billion but now worth approximately $139 billion due to Tesla’s soaring stock price.
The unanimous decision criticized the prior total rescission as “improper and inequitable,” arguing that it left Musk uncompensated for six years of transformative leadership at Tesla. Musk quickly celebrated the outcome on X, stating that he felt “vindicated.” He also shared his gratitude to TSLA shareholders.
Delaware Supreme Court makes a decision
In a 49-page ruling Friday, the Delaware Supreme Court reversed Chancellor Kathaleen McCormick’s 2024 decision that voided the 2018 package over alleged board conflicts and inadequate shareholder disclosures. The high court acknowledged varying views on liability but agreed rescission was excessive, stating it “leaves Musk uncompensated for his time and efforts over a period of six years.”
The 2018 plan granted Musk options on about 304 million shares upon hitting aggressive milestones, all of which were achieved ahead of time. Shareholders overwhelmingly approved it initially in 2018 and ratified it once again in 2024 after the Delaware lower court struck it down. The case against Musk’s 2018 pay package was filed by plaintiff Richard Tornetta, who held just nine shares when the compensation plan was approved.
A hard-fought victory
As noted in a Reuters report, Tesla’s win avoids a potential $26 billion earnings hit from replacing the award at current prices. Tesla, now Texas-incorporated, had hedged with interim plans, including a November 2025 shareholder-approved package potentially worth $878 billion tied to Robotaxi and Optimus goals and other extremely aggressive operational milestones.
The saga surrounding Elon Musk’s 2018 pay package ultimately damaged Delaware’s corporate appeal, prompting a number of high-profile firms, such as Dropbox, Roblox, Trade Desk, and Coinbase, to follow Tesla’s exodus out of the state. What added more fuel to the issue was the fact that Tornetta’s legal team, following the lower court’s 2024 decision, demanded a fee request of more than $5.1 billion worth of TSLA stock, which was equal to an hourly rate of over $200,000.
Delaware Supreme Court Elon Musk 2018 Pay Package by Simon Alvarez
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Tesla Cybercab tests are going on overdrive with production-ready units
Tesla is ramping its real-world tests of the Cybercab, with multiple sightings of the vehicle being reported across social media this week.
Tesla is ramping its real-world tests of the Cybercab, with multiple sightings of the autonomous two-seater being reported across social media this week. Based on videos of the vehicle that have been shared online, it appears that Cybercab tests are underway across multiple states.
Recent Cybercab sightings
Reports of Cybercab tests have ramped this week, with a vehicle that looked like a production-ready prototype being spotted at Apple’s Visitor Center in California. The vehicle in this sighting was interesting as it was equipped with a steering wheel. The vehicle also featured some changes to the design of its brake lights.
The Cybercab was also filmed testing at the Fremont factory’s test track, which also seemed to involve a vehicle that looked production-ready. This also seemed to be the case for a Cybercab that was spotted in Austin, Texas, which happened to be undergoing real-world tests. Overall, these sightings suggest that Cybercab testing is fully underway, and the vehicle is really moving towards production.
Production design all but finalized?
Recently, a near-production-ready Cybercab was showcased at Tesla’s Santana Row showroom in San Jose. The vehicle was equipped with frameless windows, dual windshield wipers, powered butterfly door struts, an extended front splitter, an updated lightbar, new wheel covers, and a license plate bracket. Interior updates include redesigned dash/door panels, refined seats with center cupholders, updated carpet, and what appeared to be improved legroom.
There seems to be a pretty good chance that the Cybercab’s design has been all but finalized, at least considering Elon Musk’s comments at the 2025 Annual Shareholder Meeting. During the event, Musk confirmed that the vehicle will enter production around April 2026, and its production targets will be quite ambitious.
Tesla aims to combat common Full Self-Driving problem with new patent
Delaware Supreme Court reinstates Elon Musk’s 2018 Tesla CEO pay package
