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Tesla Diner and Drive-in closes in on construction, receives wave of permit updates
The Tesla Diner, which will be built in Hollywood, California, has received numerous permit updates this week, pushing it closer than ever to construction.
One of the most underrated Tesla projects currently in development has to be its planned Drive-in Movie Theater Diner in Hollywood. Previously set to be built near Santa Monica, Tesla moved the project last year.
With two massive movie screens, 32 Superchargers, and a restaurant all mashed together, it is at least one of the most intriguing projects the automaker is working on. Now, the planned restaurant has received a wave of updates from the City of Los Angeles, moving the building forward in the permitting process and closer to construction.
Tesla has received six permit updates this week alone and an additional four in the year’s first quarter. The most recent updates are as follows:
- Tesla is addressing a new set of corrections for its restaurant design, two planned movie screens, trash enclosure, and new plumbing system, each being individual permits; updates were issued on April 3rd.
- Tesla applied for a new permit to place 8 Supercharger cabinets, 32 Supercharger Posts, one utility transformer, and two switchboards, with the City receiving the application on April 5th.
- Tesla has also applied for a new permit “to include equipment anchorage” on the 32 Supercharger posts, with the City receiving the application on April 5th.
Besides these most recent updates, Tesla has received four permitting updates in the first quarter of the year, including:
- Tesla was issued its permit to demolish the pre-existing building on the diner’s property. The permit was published on February sixteenth, though the automaker has yet to start demolition.
- The City gave Tesla new corrections for the diner’s HVAC system. This update was issued on March 9th.
- The overall site electrical plan, including the restaurant, chargers, and movie screens, totaling 24,544 square feet, is being verified by the City. The application was delivered on March 9th.
- Tesla was issued a new sewer cap permit on March 16th.
Thus far, the Tesla Diner’s final design has yet to be revealed, and until the City of Los Angeles confirms its design, it is unlikely that Tesla will be able to show off its upcoming project. However, some initial plans for the diner were leaked early last year, giving a great look and what can be expected at Tesla’s first food-serving establishment.
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- Credit: City of Santa Monica
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- Credit: City of Santa Monica
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- Credit: City of Santa Monica
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- Credit: City of Santa Monica
More recently, numerous renders have been made by countless Tesla fans based on the potential design, with the most recognizable coming from Twitter user @HowardModels.
Tesla Diner, Drive-in theater and Supercharger station final renderings. 20 Easter eggs to be found – if you know Elon’s world. To see hi-res images, after clicking an image, right click in bigger image, open in new tab(pc). pic4 is cheat sheet.#Tesla #SpaceX #boring #ElonMusk pic.twitter.com/7QsN7faJQ9
— Ed Howard (@HowardModels) June 6, 2022
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Suppose all things go smoothly with Tesla’s current permitting process. In that case, it may be possible for the automaker to begin construction of the upcoming facility as soon as this year. Still, neither the City of Los Angeles, Tesla, nor Tesla’s architectural contractor was able to supply Teslarati with a more detailed timeline at this time.
What do you think of the article? Do you have any comments, questions, or concerns? Shoot me an email at william@teslarati.com. You can also reach me on Twitter @WilliamWritin. If you have news tips, email us at tips@teslarati.com!
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.”
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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.
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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.
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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.
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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
