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.
Elon Musk
Tesla AI boss reveals how big Optimus is going to get
Tesla’s Optimus chief corrected himself on X, confirming a staggering 10 million robot production target.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner.jpg)
Tesla’s Optimus program has a new number attached to it, after Ashok Elluswamy, the executive who has run the humanoid robot program since June 2025, posted a three word correction on X Thursday, “Correction, 10 million robots.”
The line clarifies the long term annual capacity Tesla is building toward its planned second Optimus production line at Gigafactory Texas, a figure Musk has cited repeatedly since last year’s shareholder meeting.
The scale is worth noting, because ten million robots a year would mean Tesla building more units annually than most countries sell in new cars. Tesla has framed this as a second line, not the first. The buildout is happening in two phases: a roughly one million unit per year line inside Tesla’s Fremont factory, installed on the floor space vacated when Model S and Model X production ended earlier this year, and a much larger dedicated facility under construction at Giga Texas that broke ground on its first steel structure in May. That Texas facility is the one Elluswamy’s correction refers to, and is expected to reach volume production sometime in 2027.
Correction, 10 million robots https://t.co/0z4nyQNTzp
— Ashok Elluswamy (@aelluswamy) July 30, 2026
Tesla Optimus project fires up as Musk sees production line progress
Elluswamy took over Optimus from Milan Kovac last summer and has spent the months since talking up the program’s trajectory. Elon Musk has also floated the ten million figure at Tesla’s 2025 shareholder meeting.
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Ending Model S and Model X production to make room for the first Optimus line was one of the more consequential manufacturing decisions in the company’s recent history, retiring two flagship vehicles in favor of a robot that has yet to enter mass production. Musk has previously estimated per unit production costs at $20,000 to $25,000 once Tesla reaches a million units a year, though he hasn’t said what that cost looks like at ten times the volume.
SpaceX just picked up another $1.6 billion from the Pentagon, with the U.S. Space Force awarding two task orders worth $1.6 billion to fly 18 Falcon 9 missions from Vandenberg Space Force Base in California through the end of 2027. The launches will carry satellites for the Space Based Sensing and Targeting portfolio, a set of programs meant to help the military detect and track airborne threats and relay that information across forces in near real time.
The award falls under National Security Space Launch Phase 3 Lane 1, the Space Force’s faster, commercial style procurement track for missions that do not require the military’s most demanding certification process. It is also the largest single order publicly disclosed under that program so far, and the first task order issued since the Space Force nearly tripled Lane 1’s contract ceiling from $5.6 billion to $17 billion on July 17.
SpaceX to become America’s Military data backbone for missiles, drones, and warfighters
Eric Zarybnisky, the Space Force’s acting portfolio acquisition executive for space access, said the entire process, from identifying the requirement to signing the contract, took about two months, including a month set aside for companies to prepare proposals.
SpaceX is not just launching these satellites. It already holds the contracts to build two of the programs within the same portfolio, $4.16 billion for the Space Based Airborne Moving Target Indicator system and $2.29 billion for the Space Data Network Backbone, which Teslarati covered in May. That means SpaceX is now responsible for both building key pieces of the military’s next generation sensing network and getting them into orbit.
With this latest award, SpaceX’s Pentagon contract total for 2026 alone tops $8 billion, adding to a defense portfolio that already includes the Golden Dome missile defense software group SpaceX joined in April and a string of GPS launches it inherited after ULA’s Vulcan rocket ran into a booster anomaly, which we detailed in March.
Lane 1’s vendor pool technically includes seven companies: SpaceX, ULA, Blue Origin, Rocket Lab, Stoke Space, Impulse Space, and Relativity Space. In practice, SpaceX remains the only provider with the combination of launch cadence, flight proven Falcon 9 hardware, and West Coast infrastructure to support a campaign requiring roughly one Vandenberg launch a month for the next year and a half.
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Some lawmakers have flagged the growing concentration of national security launches with one company as a risk worth watching. For now, the Space Force keeps backing SpaceX, with it being the company that shows up ready to launch.
SpaceX (NASDAQ: SPCX) got an absolutely crazy price target rating from Raymond James after the company experienced a tough first few weeks following its Initial Public Offering (IPO).
Despite the tumultuous start, SpaceX has plenty of believers, and the company’s massively successful Starship launch last Friday, its 13th test flight of the massive rocket, went so smoothly that Raymond James analysts pushed its price target on the company to roughly 7 times its current trading level.
SpaceX Starship just nailed something it’s never done before
The firm officially put a “Strong Buy” rating and an $800 price target on the stock. It currently trades at around $113. Its all-time high is $225.64, reaching this trading level shortly after shares first went public.
Raymond James’ price target is tied to the firm’s confidence after Starship’s 13th test flight. Analysts at the firm said it was an incremental step that reduces engineering risks, citing the widely successful heat shield test that CEO Elon Musk recently detailed, the smooth deployment of Starlink V3 satellites, and a successful in-space engine relight.
SpaceX also managed to see Starship splash down safely in the Indian Ocean, while the Super Heavy Booster fell down to the Gulf of America with no incidents.
It is interesting to see these launches have such a tremendous impact on the stock and what investors think of it. After SpaceX initially delayed the Starship launch last week, shares fell tremendously. Most probably did not realize that the stand-down is a standard practice, especially if everything is not perfect.
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The mission was initially aborted due to an issue with Raptor engines. This was resolved, and Starship launched last Friday after another delay on Thursday, which was caused by weather.
Now that analysts have seen what SpaceX launches are capable of and how impressive the feat is, firms are adjusting their price targets accordingly, making it known that they have high expectations for the space exploration company.
Tesla Model Y L’s new features flexed at unveiling event at Diner
Tesla CEO Elon Musk denies ridiculous Gigafactory Shanghai rumor
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner-80x80.jpg)
