Investor's Corner
The ‘Tesla Effect’ is starting to extend from legacy carmakers to the oil industry
Back in February, self-made billionaire Don Gao from China mentioned that the “Tesla Effect” continues to grow even in markets beyond the California-based company’s reach. Gao, who owns Positec – a maker of power equipment – uses lithium-ion batteries for his company’s products, and they are steadily becoming a potent rival for heavyweight brands like Black & Decker. The billionaire entrepreneur noted that Tesla’s commitment to battery tech is spilling over into other industries, to the point where consumers’ perception of battery-powered devices is now changing.
“This Tesla Effect is a major trend and has really changed consumers’ perception of things that are battery driven and their capabilities,” he said.
Tesla did not come up with the electric car, nor did it come up with lithium-ion batteries. Both technologies were present even before the company was founded. That said, and partly thanks to the unraveling of Elon Musk’s first Master Plan, Tesla was able to capture an audience and a dedicated consumer base with its first vehicle – the Tesla Roadster. The small sports car was mostly a proof-of-concept, in the way that it was intended to show that electric cars need not be boring or limited in range. The car was successful enough that Tesla was able to follow it up with the Model S, a vehicle designed from the ground up to be a high-performance, long-range electric car. The rest is history.
Tesla’s electric cars were able to capture the interest of car buyers, even those that are particular about power and performance. It should be noted that Tesla’s electric cars were showing strong sales even before the company rolled out features like Autopilot. The company’s electric vehicles, from the Model S, to the Model X, to the Model 3, were desirable simply because they were excellent cars. They just happen to be powered by electricity instead of gas.
Since Tesla is still in the process of growing, its electric cars have been competing in the luxury segment. The electric vehicles themselves are not traditional luxury cars, with their minimalistic and almost spartan interiors, but they do provide a premium experience through their deep integration of software and hardware. Over the years, Tesla’s electric cars sold well, until such time that they started outselling mainstays from legacy carmakers like BMW and Mercedes-Benz. The Tesla Model 3, the company’s first attempt at a mass-market car, was recently listed as the 4th best-selling passenger car in the US, beating out competitors from the luxury midsize segment like the Mercedes-Benz C-Class.
In the same way that companies unrelated to Tesla are starting to explore the potential of lithium-ion batteries partly due to the electric car maker, a number of legacy automakers have accelerated their transition to electrified transport as well. Among the German carmakers, several have expressed their intent to come up with their own premium electric vehicles. Mercedes-Benz has the EQ program, Volkswagen just announced that it is investing ~$7 billion into e-mobility, and Porsche has the Taycan, a high-performance electric car that’s set to meet the Model S head-on in the premium EV market. Most of these carmakers would likely not acknowledge it, but there is little doubt that the transition to electrified transport was expedited by the efforts of a small electric car startup from Silicon Valley.
In a way, the Tesla Effect is happening at the perfect time. Several regions in the world are shifting towards cleaner forms of transportation. China plans to eventually ban diesel and gasoline-powered cars in its major cities. France and Britain have both committed to banning gas-powered automobiles in the future as well. Earlier this month, the EU Parliament voted for a 20% cut in CO2 emissions from new cars and vans in 2025 and a 40% reduction in 2030, accelerating the region’s transition towards cleaner transport. To effectively support the transition, carmakers, from startups like Tesla to pedigreed veterans like Mercedes-Benz, have to ramp their efforts at creating even more compelling, cost-effective electric vehicles.
In a recent segment on CNBC, Paul Sankey of Mizuho Securities mentioned that the “Tesla Effect” is starting to make its way to the oil industry as well. Last Thursday, oil prices tumbled as much as 4% amidst concerns about the fallout from the United States’ sanctions on Iran, the OPEC’s third-biggest crude oil producer. Wall St. analysts noted that oil could be in striking distance of $100 per barrel – an adjustment that would be felt by owners of fossil fuel-powered cars. The Mizuho analyst noted that part of the reasons behind the struggles of the oil industry is the shifting perception towards oil itself.
“Essentially, the big issue is the so-called “Tesla Effect,” the general “End of the Oil Age” theme that is a problem for these (oil) stocks. As the oil price goes up, especially to the levels we’re at now and potentially beyond, it’s almost as if the Tesla Effect could be exacerbated by the potential for higher oil prices to accelerate the end of the Oil Age. The Tesla Effect is the overall concept that (while) the 20th century was driven by oil, the 21st century will be driven by electricity. There’s a 30-year transition, and we’re somewhere probably 10 years into that transition. Ultimately, (the) terminal value of oil has been severely affected by the potential for us to change behavior,” the analyst said.
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What is quite remarkable is that Tesla is nowhere close to reaching the company’s overall goals. Elon Musk once noted that Tesla would not stop until all cars in the road are electric. And the truth is, even if the company reaches its production targets for the Model 3 and the Model Y and its future Truck and compact sedan, Tesla would not be able to transition the auto industry towards electrification on its own. What Tesla could do, though, is to accelerate this transition, and if recent projects by legacy carmakers are any indication, it appears that the Silicon Valley-based company is doing just that.
SpaceX stock did the opposite of what most of Wall Street expected this week, when the day designed to be its most dangerous turned into a rally, and the rally kept going.
Thursday marked the first major lockup expiration since SpaceX’s June IPO, making roughly 911.5 million insider held shares eligible to trade for the first time, more than doubling the company’s public float. Analysts and short sellers had spent weeks bracing for a flood of selling, especially after the stock fell 13 percent following its first earnings report as a public company on Tuesday. Instead, shares rose 6.1 percent Thursday to close at $114.92, and by Friday they were trading near $129, up more than another 12 percent on the day.
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
The setup made the outcome notable. Short interest had climbed to roughly 34 percent of the float heading into earnings, among the highest of any large cap stock, with about 95 percent of available shares to borrow already on loan. CEO Elon Musk warned short sellers twice in the weeks before the lockup, writing on X that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” then following up on the morning of earnings with “I try to warn them, but they just double down.”
When the newly unlocked shares hit the market and the selloff never showed up, some of that short position appears to have started unwinding. TipRanks reported that options activity shifted toward bullish strategies like put selling and risk reversals following the rally, with roughly $600 million in options premium trading Thursday alone. Retail buyers also stepped in during the earnings dip, according to Vanda Research.
The fundamentals behind the stock have not changed much in a week. SpaceX’s revenue nearly doubled year over year to $7.8 billion, with Starlink subscribers doubling to 12 million and the company’s AI segment growing 247 percent. What spooked investors on Tuesday was the spending side. Capital expenditures jumped to more than $18 billion for the quarter, up from $2.8 billion a year earlier, with AI investment alone rising from $749 million to $15.8 billion. Wall Street remains split on whether that spending is building infrastructure SpaceX needs or outrunning what the business can currently support, a debate Teslarati has tracked since shares first came under pressure.
None of that resolves the bigger question hanging over the stock. Thursday’s release was only the first of nine staggered lockup tranches, with roughly $800 billion worth of additional shares scheduled to become eligible through October, and Musk’s own stake stays locked until next June. If this week is any indication, the market is treating that supply as something it can absorb rather than something to fear, at least for now.
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Cybertruck
Tesla Cybertruck production snaps back after ugly supplier fight
Cybertrucks are piling up again at Giga Texas after Tesla’s court win against a parts supplier.
Cybertruck production at Giga Texas is showing its first visible recovery since Tesla sued a supplier last month over withheld manufacturing tooling.
Aerial observer Joe Tegtmeyer flew over the Austin factory Wednesday morning and counted roughly 100 or more Cybertrucks filling the outbound lot, a sharp jump from the thin numbers seen in recent weeks. The flyover came a day after a judge granted Tesla a temporary restraining order against Angstrom Automotive Group, the parts supplier at the center of the dispute.
Tesla filed an emergency lawsuit in late July after Angstrom told the automaker it planned to close the Troy, Texas facility where Tesla’s die-cast tools, trim dies and other Cybertruck stamping equipment were housed. According to Tesla’s complaint, a shipment of 700 finished parts never left the building, and when Tesla sent representatives to retrieve its equipment, accompanied by law enforcement, they were turned away. Angstrom allegedly then asked for an extra $250,000 a week to keep operating, which Tesla’s filing described as holding its own property for ransom.
TESLA: U.S. District Judge Christopher R. Wolfe of the U.S. District Court for the Western District of Texas, Waco Division granted Tesla a Temporary Restraining Order and Writ of Replevin in its dispute with Angstrom Automotive (Case No. 6:26-cv-00477).
The order authorizes… https://t.co/E1DKcQSxMn pic.twitter.com/LR8aAiV2Og
— S.E. Robinson, Jr. (@SERobinsonJr) August 5, 2026
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The restraining order gives Tesla immediate right of entry to Angstrom’s facility to recover the tooling. It is temporary, with a fuller hearing still to come, but the speed of Wednesday’s rebound suggests the Angstrom shortage was indeed the main bottleneck limiting Cybertruck output. Outbound lot counts are an imperfect measure of actual production, since finished trucks can sit for days before shipping, but a lot that full after a lean stretch is a meaningful signal.
Cybertruck output at Giga Texas has fluctuated all year as Tesla worked through supply issues and introduced new trims, including a cheaper Dual Motor AWD version that drew strong early demand.
Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
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CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
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