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Tesla Cybertruck’s biggest rival is poised for a delay, and GM’s stance against CA’s standards isn’t helping
The Tesla Cybertruck will meet several competitors when it enters the market. There’s the Rivian R1T pickup truck, a luxury vehicle designed for the outdoors. There’s the Ford F-150 Electric, the EV version of America’s most popular pickup truck. But perhaps the Cybertruck’s biggest rival, both in terms of literal size and specs, is GM’s Hummer EV, a vehicle that represents the antithesis of Tesla’s exoskeleton-clad monster.
The GMC Hummer EV and the Tesla Cybertruck come from very different backgrounds. The Cybertruck is what happens when Tesla is unrestrained, and it is unashamedly different in its design and features. The Hummer EV, on the other hand, is a redemption of sorts for GM, as the emergence of the massive, gas-guzzling original Hummer marked one of the nails in the coffin of the veteran automaker’s controversial EV1 electric car.
The Hummer EV has garnered a lot of attention, and it is set for a reveal this May 20. However, the coronavirus pandemic may put a damper on the upcoming vehicle’s official unveiling. With social distancing rules pretty much negating the possibility of a launch event for the truck, sources familiar with the matter have told motoring publication CarBuzz that the Hummer EV’s unveiling will be rescheduled. This is not surprising at all considering the circumstances that have arisen from the pandemic, but it is unfortunate, nonetheless.
This potential delay could cost the Hummer EV a lot of momentum. The vehicle is already entering the all-electric pickup market pretty late, with companies like Rivian and Tesla already poised to release their trucks in the next year or so. Furthermore, the Hummer EV is riding a wave of momentum that resulted from GM’s clever teasers in recent months. Any delays in the vehicle’s unveiling might then result in waning interest from the EV community.
This is bitter pill to swallow for GM, especially since leaked production plans from the automaker have revealed that much of its commitments to electrification are not very serious at all. As indicated by production plans accessed by Reuters, both GM and Ford still intend to adopt a strategy that is heavily skewed towards the internal combustion engine for the next few years. This is despite CEO Mary Barra arguing that GM is dead serious about electrification.
But perhaps the biggest blow to the Hummer EV yet is coming from GM’s standing among car buyers. Earlier this year, GM, together with Toyota and Fiat Chrysler, decided to side with US President Donald Trump in his efforts to revoke California’s higher emissions standards. This promptly resulted in losses for GM, with CA banning the use of the company’s vehicles for its fleet. But it doesn’t end there.
According to the findings of a poll conducted by Matt George Associates for the Union of Concerned Scientists (UCS), GM’s decision to stand against California’s emissions standards has adversely affected its standing among car buyers. Out of the 1,000 owners surveyed, 51% who initially stated that they would “definitely purchase” another GM vehicle in the future decided to change their minds after learning of the company’s anti-emissions standards stance. GM’s favorability among buyers also saw a steep drop from 93% to just 44%.
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These sentiments from the car buying public are the last thing that the Hummer EV needs to be a success. Using the Hummer, a vehicle that is traditionally perceived as the very representation of excess, as an entry into the electric truck market, is a bold move for GM. But successful bold moves usually involve a lot of delicate pieces lining up perfectly enough. Unfortunately for GM, the delays in the Hummer EV’s launch, coupled with negative sentiments against the company, may very well derail the all-electric truck even before its arrival.
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 headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
