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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.
News
Tesla puts Giga Berlin in Plaid Mode with new massive investment
The facility, Tesla’s first in Europe, opened in 2022 and has become a cornerstone for Model Y production and, increasingly, in-house battery manufacturing. Recent announcements highlight a dual focus on scaling vehicle output and advancing vertical integration through 4680 battery cells.
Tesla is pushing forward with significant upgrades at its Gigafactory Berlin-Brandenburg in Grünheide, Germany, signaling renewed confidence in its European operations despite past market challenges.
The facility, Tesla’s first in Europe, opened in 2022 and has become a cornerstone for Model Y production and, increasingly, in-house battery manufacturing. Recent announcements highlight a dual focus on scaling vehicle output and advancing vertical integration through 4680 battery cells.
In April, plant manager André Thierig announced a 20 percent increase in Model Y production starting in July, following a record Q1 output of more than 61,000 vehicles. To support the ramp-up, Tesla plans to hire approximately 1,000 new employees beginning in May and convert 500 temporary workers to permanent positions.
The move is expected to lift weekly production significantly, addressing rebounding demand in Europe after a challenging 2025.
Today, we announced a $ 250m investment for our Giga Berlin Cell factory. This will enable 18GWh of annual 4680 cell production and create more than 1500 new jobs. Good news during challenging times for the German industry. pic.twitter.com/ou4SWMfWh9
— André Thierig (@AndrThie) May 12, 2026
The expansion builds on earlier progress. In 2025, Tesla secured partial approvals to add roughly 2 million square feet of factory space, raising potential annual vehicle capacity from around 500,000 toward 800,000 units, with longer-term ambitions approaching one million vehicles per year. Logistical improvements, new infrastructure, and battery-related facilities are already underway on company-owned land.
Battery production is the latest major focus. On May 12, Thierig revealed an additional $250 million investment in the on-site cell factory. This more than doubles the planned 4680 battery cell capacity to 18 gigawatt-hours annually—up from the 8 GWh target set in December 2025—while creating over 1,500 new battery-related jobs.
Total cell investments at the site now exceed previous figures, bringing the factory closer to full vertical integration: cells, packs, and vehicles produced under one roof. Tesla describes this as unique in Europe and a step toward stronger supply chain resilience.
The plans come amid regulatory and community hurdles. Earlier expansion proposals faced protests over environmental concerns and water usage, leading to phased approvals beginning in 2024. Tesla has navigated these by emphasizing sustainable practices and economic benefits, including thousands of local jobs in Brandenburg.
With nearly 12,000 employees already on site and production steadily climbing, Gigafactory Berlin is poised for growth. The combined vehicle and battery expansions position the plant as a key hub for Tesla’s European ambitions, potentially making it one of the continent’s largest manufacturing complexes if local support continues.
As EV demand recovers, these investments underscore Tesla’s commitment to scaling efficiently in Germany while addressing regional supply chain needs.
News
Honda gives up on all-EV future: ‘Not realistic’
Mibe believes the demand for its gas vehicles is certainly strong enough and has changed “beyond expectations.” As many drivers went for EVs a few years back, hybrids are becoming more popular for consumers as they offer the best of both worlds.
Honda has given up on a previous plan to completely changeover to EVs by 2040, a new report states. The company’s CEO, Toshihiro Mibe, said that the idea is “not realistic.”
Mibe believes the demand for its gas vehicles is certainly strong enough and has changed “beyond expectations.” As many drivers went for EVs a few years back, hybrids are becoming more popular for consumers as they offer the best of both worlds.
Mibe said (via Motor1):
“Because of the uncertainty in the business environment and also the customer demand, is changing beyond our expectation and, therefore, we have judged that it’ll be difficult to achieve. That ratio [100-percent electric in 2040] is not realistic as of now. We have withdrawn this target.”
Instead of going all-electric, Honda still wants to oblige by its hopes to be net carbon neutral by 2050. It will do this by focusing on those popular hybrid powertrains, planning to launch 15 of them by March 2030.
Honda will invest 4.4 trillion yen, or almost $28 billion, to build hybrid powertrains built around four and six-cylinder gas engines.
There are so many companies abandoning their all-electric ambitions or even slowing their roll on building them so quickly. Ford, General Motors, Mercedes, and Nissan have all retreated from aggressive EV targets by either cancelling, delaying, or pausing the development of electric models.
Hyundai’s 2030 targets rely on mixed offerings of electric, hybrid & hydrogen vehicles
Early-decade pledges from multiple brands proved overly ambitious as infrastructure lags, battery costs remain high in some markets, and many buyers prefer hybrids for their convenience and range. Toyota has long championed hybrids, while others have quietly extended internal-combustion timelines.
For Honda—historically known for reliable gasoline engines—this shift leverages its core strengths while buying time to refine electric technology. Whether the hybrid-heavy strategy will protect market share in an increasingly competitive landscape remains to be seen, but one thing is clear: the gas engine is far from dead at Honda, unfortunately.
Elon Musk
Delta Airlines rejects Starlink, and the reason will probably shock you
In a pointed exchange on X, Elon Musk defended SpaceX’s uncompromising approach to Starlink’s in-flight internet service, explaining why Delta Air Lines walked away from a deal.
SpaceX frontman Elon Musk explained on Wednesday why commercial airline Delta got cold feet over offering Starlink for stable internet on its flights — and the reason will probably shock you.
In a pointed exchange on X, Elon Musk defended SpaceX’s uncompromising approach to Starlink’s in-flight internet service, explaining why Delta Air Lines walked away from a deal.
Delta rejected Starlink because it insisted on routing all connectivity through its branded “Delta Sync” portal rather than allowing a simple Starlink experience.
Instead, the airline partnered with Amazon’s Project Kuiper—rebranded as Amazon Leo—for high-speed Wi-Fi on up to 500 aircraft, with rollout targeted for 2028. At the time of the announcement, Kuiper had roughly 300 satellites in orbit, while Starlink operated more than 10,400.
The use of the “Delta Sync” portal would not work for SpaceX, as Musk went on to say that:
“SpaceX requires that there be no annoying ‘portal’ to use Starlink. Starlink WiFi must just work effortlessly every time, as though you were at home. Delta wanted to make it painful, difficult and expensive for their customers. Hard to see how that is a winning strategy.”
Musk doubled down in a follow-up post:
“Yes, SpaceX deliberately accepted lower revenue deals with airlines in exchange for making Starlink super easy to use and available to all passengers.”
Not exactly. SpaceX requires that there be no annoying “portal” to use Starlink.
Starlink WiFi must just work effortlessly every time, as though you were at home.
Delta wanted to make it painful, difficult and expensive for their customers. Hard to see how that is a winning…
— Elon Musk (@elonmusk) May 13, 2026
SpaceX has structured its airline agreements to prioritize zero-friction access—no captive portals, no SkyMiles logins, no paywalls or ads blocking basic connectivity.
While this means forgoing higher-margin deals that would let carriers monetize the service more aggressively, it ensures Starlink feels like home broadband at 35,000 feet. Passengers on partner airlines such as United, Qatar Airways, and Air France have already praised the service for enabling seamless video calls, streaming, and work mid-flight without interruptions.
Delta’s choice reflects a different philosophy. By keeping Wi-Fi behind its Delta Sync ecosystem, the airline aims to drive loyalty program engagement and control the digital passenger journey. Yet, critics argue this short-term control comes at the expense of immediate competitiveness.
Airlines already installing Starlink are pulling ahead in customer satisfaction surveys, while Delta passengers face years of reliance on slower, legacy systems until Leo launches.
SpaceX’s decision to trade revenue for simplicity will pay off in the longer term, as Starlink is already positioning itself as the default high-speed option for carriers that value passenger satisfaction over incremental fees.
Musk’s focus on creating not only a great service but also a reasonable user experience highlights SpaceX’s prowess with Starlink as it continues to expand across new partners and regions.
Tesla puts Giga Berlin in Plaid Mode with new massive investment
Honda gives up on all-EV future: ‘Not realistic’
