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Tesla earns nod of respect from legacy auto for pushing sustainable transportation
It took multiple bet-the-company situations, trips to “production hell,” and a massive push towards profitability in the third quarter, but Tesla has pretty much become the undeniable leader in premium electric mobility. With the Model 3 proving to be a success in the United States and getting a lot of interest in markets such as Europe and Asia, Tesla is practically becoming an inconvenient truth to traditional automakers — particularly those that have held off on the development of zero-emissions vehicles.
Earlier this year, Paul Sankey of Mizuho Securities noted during a segment on CNBC that the “Tesla Effect” is starting to spill over to industries beyond the car market. Sankey described the Tesla Effect as a trend that pushes the idea that the 21st century will be driven by clean electricity in the same way that the 20th century was driven by oil. Among legacy carmakers, this particular shift is starting to become notable.
Recently, executives from a number of established automakers acknowledged Tesla’s contribution to the evolution of sustainable transportation. In a recent interview with the Los Angeles Times, for example, Porsche North America Chief Executive Klaus Zellmer validated Tesla’s breakthroughs in the electric car market, praising the company for its “astonishing” work.
“If you look at what Tesla has done, if you look at their volume and look at their price level, it’s truly astonishing. If you can do that with one brand and a sales network that is not comprised of dealers and a real sales organization, it’s even more astonishing,” he said.
Hope King of Cheddar inquired about Tesla while speaking with executives from several legacy carmakers during the 2018 LA Auto Show as well. Just like Porsche’s Zellner, the execs from the establishes carmakers also admitted that Tesla’s progress over the years had affected their business and the industry as a whole.
Audi of America senior product manager Anthony Foulk noted that Tesla has “pushed the entire auto industry forward and broken ground for some different topics in the industry.” Foulk pointed out that Tesla is among the reasons why Audi opted to release the e-tron SUV, an electric vehicle that is “meant to be accessible to a wide portion” of the market. Volkswagen of America Sales and Marketing executive Derrick Hatami echoed Foulk’s observations, stating that Tesla has provided an “interesting window into what the possibilities could be for electric vehicles and future retail models for the auto industry.” Hatami further remarked that the electric car maker had given other automakers “something to look at and aim for” with regards to the development of EVs.
Masahiro Moro, the President and CEO of Mazda’s North American operations, lauded Tesla for its tendency to boldly break through conventions and adopt strategies that are experimental at best. Moro noted that with Tesla in the market, “we (legacy carmakers) have to look at ourselves to see if there are unmet needs of consumers so we can innovate our process.” Bugatti President Stephan Winkelmann also validated Tesla’s contributions to the car market, stating that the electric car maker has “pushed the car industry in one direction,” while allowing other companies to admit that “social acceptance is key for the future of every car manufacturer.”
Gorden Wagener, Chief Designer of Mercedes-Benz, was optimistic about Tesla’s breakthroughs, particularly when it comes to the features and capabilities of vehicles on the road. Wagener noted that Tesla’s approach to its electric cars is encouraging other companies to “change this industry in the next 10 years more than in the 100 years before” — something that the designer admitted is a “very exciting to do.”
Tesla’s mission has been clear since day one — it aims to accelerate the world’s transition to renewable energy. Elon Musk has reiterated this multiple times, and the company itself has admitted that Tesla cannot push the transition to sustainability on its own. In the auto sector, other companies — particularly legacy carmakers that already have large manufacturing infrastructures — have to commit to developing zero-emissions vehicles as well.
Several companies have already taken valuable steps towards this goal. Porsche announced earlier this year that it is abandoning its entire diesel lineup ahead of the release of the Taycan, its first all-electric sedan. Reports have also emerged that Jaguar is looking to transition itself into a company that exclusively produces all-electric cars.
Perhaps more importantly, though, is that a number of legacy carmakers are starting to realize that there is a very real demand for electric vehicles. Norwegian news agency Dagens Næringsliv, for one, noted that Audi’s sales dropped almost 80% in Norway last month. Inasmuch as the steep decline is rather alarming, Audi’s Head of Communications Morten Moum stated that a big reason behind the decline is that car buyers are waiting for the company’s electrified vehicles, such as the hybrid Q7 e-tron SUV.
In October, estimates indicate that Jaguar sold around 1,200 units of the I-PACE, accounting for 8.7% of the company’s overall vehicle sales. Hyundai also reported that sales of the Kona Electric, its budget electric crossover, rose to 2,473 units in October, 1,000 more than the company sold in September. Estimates also point to 46% of Kona buyers opting in for the vehicle’s electric variant over its more affordable gas-powered counterpart.
Tesla’s growth over the past 15 years has been notable. Amidst the changing tides of the auto industry, the electric car maker is poised to grow even more as it establishes its place as a first mover and leader in the EV movement. It took daring gambits and years of pain and stress, but it appears that finally, Tesla has reached the point where the auto industry’s veterans are not only recognizing, but also respecting, the company’s efforts in pushing towards sustainable transportation.
Tesla analyst Gary Black of The Future Fund claims that the company is making a big mistake getting rid of the Model S and Model X. Instead, he believes another vehicle within the company’s lineup should be discontinued: the Cybertruck.
Black divested The Future Fund from all Tesla holdings last year, but he still covers the stock as an analyst as it falls in the technology and autonomy sectors, which he covers.
In a new comment on Thursday, Black said the Cybertruck should be the vehicle Tesla gets rid of due to the negatives it has drawn to the company.
The Cybertruck is also selling in an underwhelming fashion considering the production capacity Tesla has set aside for it. It’s worth noting it is still the best-selling electric pickup on the market, and it has outlasted other EV truck projects as other manufacturers are receding their efforts.
Black said:
“IMHO it’s a mistake to keep Tesla Cybertruck which has negative brand equity and sold 10,000 units last year, and discontinue S/X which have strong repeat brand loyalty and together sold 30K units and are highly profitable. Why not discontinue CT and covert S/X to be fully autonomous?”
IMHO it’s a mistake to keep $TSLA Cybertruck which has negative brand equity and sold 10,000 units last year, and discontinue S/X which have strong repeat brand loyalty and together sold 30K units and are highly profitable. Why not discontinue CT and covert S/X to be fully…
— Gary Black (@garyblack00) January 29, 2026
On Wednesday, CEO Elon Musk confirmed that Tesla planned to transition Model S and Model X production lines at the Fremont Factory to handle manufacturing efforts of the Optimus Gen 3 robot.
Musk said that it was time to wind down the S and X programs “with an honorable discharge,” also noting that the two cars are not major contributors to Tesla’s mission any longer, as its automotive division is more focused on autonomy, which will be handled by Model 3, Model Y, and Cybercab.
Tesla begins Cybertruck deliveries in a new region for the first time
The news has drawn conflicting perspectives, with many Tesla fans upset about the decision, especially as it ends the production of the largest car in the company’s lineup. Tesla’s focus is on smaller ride-sharing vehicles, especially as the vast majority of rides consist of two or fewer passengers.
The S and X do not fit in these plans.
Nevertheless, the Cybertruck fits in Tesla’s future plans. Musk said the pickup will be needed for the transportation of local goods. Musk also said Cybertruck would be transitioned to an autonomous line.
In a groundbreaking new report from Reuters, SpaceX is reportedly discussing merger possibilities with xAI ahead of the space exploration company’s plans to IPO later this year, in what would be a blockbuster move.
The outlet said it would combine rockets and Starlink satellites, as well as the X social media platform and AI project Grok under one roof. The report cites “a person briefed on the matter and two recent company filings seen by Reuters.”
Musk, nor SpaceX or xAI, have commented on the report, so, as of now, it is unconfirmed.
With that being said, the proposed merger would bring shares of xAI in exchange for shares of SpaceX. Both companies were registered in Nevada to expedite the transaction, according to the report.
On January 21, both entities were registered in Nevada. The report continues:
“One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company’s chief financial officer, as managing members, while the other lists Johnsen as the company’s only officer, the filings show.”
The source also stated that some xAI executives could be given the option to receive cash in lieu of SpaceX stock. No agreement has been reached, nothing has been signed, and the timing and structure, as well as other important details, have not been finalized.
SpaceX is valued at $800 billion and is the most valuable privately held company, while xAI is valued at $230 billion as of November. SpaceX could be going public later this year, as Musk has said as recently as December that the company would offer its stock publicly.
The plans could help move along plans for large-scale data centers in space, something Musk has discussed on several occasions over the past few months.
At the World Economic Forum last week, Musk said:
“It’s a no-brainer for building solar-powered AI data centers in space, because as I mentioned, it’s also very cold in space. The net effect is that the lowest cost place to put AI will be space and that will be true within two to three years, three at the latest.”
He also said on X that “the most important thing in the next 3-4 years is data centers in space.”
If the report is true and the two companies end up coming together, it would not be the first time Musk’s companies have ended up coming together. He used Tesla stock to purchase SolarCity back in 2016. Last year, X became part of xAI in a share swap.
Tesla has announced it has hit a major milestone with Full Self-Driving subscriptions, shortly after it said it would exclusively offer the suite without the option to purchase it outright.
Tesla announced on Wednesday during its Q4 Earnings Call for 2025 that it had officially eclipsed the one million subscription mark for its Full Self-Driving suite. This represented a 38 percent increase year-over-year.
This is up from the roughly 800,000 active subscriptions it reported last year. The company has seen significant increases in FSD adoption over the past few years, as in 2021, it reported just 400,000. In 2022, it was up to 500,000 and, one year later, it had eclipsed 600,000.
NEWS: For the first time, Tesla has revealed how many people are subscribed or have purchased FSD (Supervised).
Active FSD Subscriptions:
• 2025: 1.1 million
• 2024: 800K
• 2023: 600K
• 2022: 500K
• 2021: 400K pic.twitter.com/KVtnyANWcs— Sawyer Merritt (@SawyerMerritt) January 28, 2026
In mid-January, CEO Elon Musk announced that the company would transition away from giving the option to purchase the Full Self-Driving suite outright, opting for the subscription program exclusively.
Musk said on X:
“Tesla will stop selling FSD after Feb 14. FSD will only be available as a monthly subscription thereafter.”
The move intends to streamline the Full Self-Driving purchase option, and gives Tesla more control over its revenue, and closes off the ability to buy it outright for a bargain when Musk has said its value could be close to $100,000 when it reaches full autonomy.
It also caters to Musk’s newest compensation package. One tranche requires Tesla to achieve 10 million active FSD subscriptions, and now that it has reached one million, it is already seeing some growth.
The strategy that Tesla will use to achieve this lofty goal is still under wraps. The most ideal solution would be to offer a less expensive version of the suite, which is not likely considering the company is increasing its capabilities, and it is becoming more robust.
Tesla is shifting FSD to a subscription-only model, confirms Elon Musk
Currently, Tesla’s FSD subscription price is $99 per month, but Musk said this price will increase, which seems counterintuitive to its goal of increasing the take rate. With that being said, it will be interesting to see what Tesla does to navigate growth while offering a robust FSD suite.
Tesla analyst claims another vehicle, not Model S and X, should be discontinued
SpaceX reportedly discussing merger with xAI ahead of blockbuster IPO
