Investor's Corner
Elon Musk’s Tesla insurance plans could ultimately prove Warren Buffett wrong
During Tesla’s first-quarter earnings call, Elon Musk mentioned that the electric car maker is coming up with an insurance service for its vehicles. Musk noted that Tesla’s insurance plan would be unique in a way that it will leverage customer data collected from its fleet of vehicles. This will, according to the CEO, create a program that is “much more compelling than anything else” in the market.
Such statements sound very optimistic, and in true Elon Musk fashion, the CEO raised the bar for the upcoming service higher, adding that Tesla’s insurance program could see a launch as early as next month. These targets were unsurprisingly met with much skepticism. Tesla’s avid critics dismissed the plan and Musk’s comments as another “funding secured” moment, and even experienced investors expressed their doubts about the program’s potential success.
Doubts from the Oracle
Arguably the most notable critic of Tesla’s insurance plan is financial titan Warren Buffett, CEO of Berkshire Hathaway. Speaking at the Berkshire Hathaway annual meeting on Saturday, Buffett noted that Elon Musk’s insurance aspirations would likely fail. “It’s not an easy business. The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business,” he said.
The financial titan explained further, stating that veteran automaker General Motors had unsuccessfully attempted a similar program in the past under its Motors Insurance Company. Though Buffett, fondly known in the investment world as the “Oracle from Omaha,” admitted that the trove of data that Tesla gathers from its fleet, he argued that the electric car maker would likely not make money in its insurance endeavors.
“And I would bet against any company in the auto business (getting into insurance) being any kind of an unusual success. The idea of using telematics in terms of studying people — it is important to have data on how people drive, how hard they brake, how much they swerve, all kinds of things. So I don’t doubt the value of the data. But I don’t think the auto companies will have any advantage to that. I don’t think they’ll make money in the insurance business,” Buffett explained.
A case for Tesla’s insurance plans
Buffett holds a lot of authority in the insurance industry, with Berkshire having Geico and General Reinsurance among its numerous subsidiaries. Yet, despite these concerns, Elon Musk’s plan for Tesla’s own insurance program could actually work. Contrary to speculations from the company’s critics suggesting that Musk is merely shooting from the hip, Tesla is actually working with experienced insurance firms to develop its own program. Among these is Markel Corporation (ironically dubbed at times as a “mini-Berkshire” stock). During the firm’s quarterly conference call last week, co-CEO Richard Whitt stated that one of Markel’s subsidiaries, State National, will provide the fronting for Tesla’s insurance.
“Often the people that have these innovative ideas have a hard time navigating the regulatory environment and being able to execute quite honestly on their innovative ideas. That’s where State National can come to the table and help them. In the case of the partnership with Tesla, State National is providing just that. They’re supporting innovative solutions that Tesla has [created] with risk-taking partners. And I don’t want to say any more than that, because obviously Tesla and the risk-taking partner have many things they probably want to say about the arrangement,” Whitt said.
Another advantage that Tesla might have with its upcoming program is that Elon Musk’s primary goal is likely not to “make money in the insurance business” in the near-term. Instead of chasing profits immediately after its rollout, Tesla’s insurance could simply be rolled out as a means to streamline the ownership experience of the company’s electric cars further. Together with several inherent advantages of the company’s vehicles, such as the absence of fuel purchases, affordable Supercharging rates, and unique driving dynamics offered by their all-electric powertrain, having a customized, worry-free insurance service could be yet another factor that can make Teslas attractive to car buyers.
A lot of the details surrounding Tesla’s insurance plans are yet to be announced, and it remains to be seen if the company could ultimately pull off an endeavor that could prove the world’s third-richest person wrong. Ultimately, just as it was far too early to discount SpaceX after the initial failures of the Falcon 1 rocket, it might simply be far too early to dismiss Elon Musk’s plans for Tesla’s own insurance program.
Tesla short sellers won big following the company’s massive fall on Wall Street after it reported subpar Earnings on Wednesday.
Tesla short sellers collected about $4.12 billion in single-day profits on Thursday, according to Bloomberg. Shares fell as much as 15 percent during Thursday’s session. It closed as one of the worst days for Tesla on Wall Street in the past three years.
Investors sold off the stock after Tesla said it would aggressively direct its spending toward AI and its Optimus robot project. The company had record revenues, which were driven by one of the strongest quarters in terms of vehicle deliveries in company history.
However, it missed EPS estimates by reporting just $0.33, a far cry from the $0.53 analysts expected.
S3 Partners reported that about 3 percent of Tesla’s outstanding stock is sold short. Managing Director at S3, Ihor Dusaniwsky, provided the short seller’s potential profit, as well as another figure: shorts have likely had paper gains of $8.92 billion this year, as Tesla shares are down 30 percent in 2026.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla has burned short sellers many times in the past, but the company’s latest Earnings Call was a chance for those skeptics to taste some payback. Although the company gave some very transparent information regarding future projects, the rollout of Robotaxi, Optimus, and Semi, many investors took their profits on Thursday.
Notable short sellers like Michael Burry have been transparent about their skepticism around Tesla shares. Burry just revealed three weeks ago that he had opened up a new short on the stock, stating he shorted Tesla shares at $416.22. “Happy it jumped back to this level,” he said in a blog post.
At the time of publication, Tesla shares were down about 3 percent and the stock was trading at $309.92.
Tesla stock (NASDAQ: TSLA) endured one of its sharpest single-day declines in years on July 23, tumbling approximately 14.5 percent and closing near $320 after opening the session around $374. The drop erased more than $140 billion in market value amid heavy trading volume and left the shares at multi-week lows.
The sell-off followed the company’s second-quarter 2026 results, released the previous evening. Tesla reported record revenue of $28.2 billion, up 26 percent year over year, driven by a Q2-record 480,126 vehicle deliveries. Energy storage deployments also rose strongly.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Yet profitability disappointed sharply. Operating income fell 57 percent to $398 million, compressing the operating margin to just 1.4 percent. Non-GAAP earnings per share came in at $0.33, well below the roughly $0.53 analysts had expected. Free cash flow turned negative by $1.1 billion as capital expenditures surged 142 percent to $5.8 billion, largely tied to accelerated spending on artificial intelligence, robotics, and autonomous systems.
The losses on capex were expected, as Tesla said it would be spending heavily in 2026.
Investors also reacted to lingering uncertainty surrounding key product timelines. During the Earnings Call, management reiterated ambitions for Robotaxi deployment and the Optimus humanoid robot, but offered limited new concrete milestones, renewing questions about execution pace that have long accompanied Tesla’s ambitious roadmap.
The magnitude of the decline places it among Tesla’s more severe one-day percentage losses since its 2010 initial public offering. Historically, the two largest single-day drops (split-adjusted) remain September 8, 2020, when shares fell 21.1 percent amid broader market volatility and valuation concerns, and January 13, 2012, with a 19.3 percent plunge during the company’s early growth struggles.
Other notable declines include an 18.6 percent drop on March 16, 2020, at the onset of pandemic-related market turmoil. Thursday’s move ranks roughly ninth on the all-time list but stands out as the steepest in more than a year.
Despite the short-term pain, Tesla’s long-term trajectory has repeatedly recovered from such volatility. The latest results underscore both the strength of its core automotive and energy businesses and the near-term costs of heavy investment in next-generation technologies.
In a striking revelation that underscores the lucrative crossover between Big Tech and space exploration, Alphabet Inc., Google’s parent company, disclosed a massive $94.1 billion equity stake in SpaceX following the rocket company’s blockbuster initial public offering earlier this year.
The disclosure came in Alphabet’s quarterly filing, marking the first time the long-held private investment has been publicly valued at market prices. Google was an early backer, investing alongside Fidelity in 2015 with roughly $500-900 million at a time when SpaceX was valued around $12 billion.
That bet has delivered extraordinary returns, roughly a hundredfold, transforming a strategic play on satellite internet and launch capabilities into one of Alphabet’s largest assets.
Google, $GOOGL, has said they hold $94 billion in SpaceX, $SPCX, shares after IPO.
— unusual_whales (@unusual_whales) July 23, 2026
Of the total holding, approximately $80 billion remains subject to short-term post-IPO lockup restrictions, preventing near-term sales. An additional $14.1 billion faces longer-term restrictions, extending into the third quarter of 2027. This structure limits immediate liquidity but protects against market volatility as SpaceX transitions into public trading.
The SpaceX position contributed significantly to gains in Alphabet’s broader investment portfolio, which also includes a major stake in AI leader Anthropic. Combined, these holdings helped drive nearly $100 billion in investment gains during the second quarter, providing a substantial boost to net income amid ongoing AI spending pressures.
Analysts view the disclosure as validation of Alphabet’s venture strategy beyond its core search and cloud businesses. The investment aligns with deeper ties, including reported multi-billion-dollar deals for AI computing capacity on SpaceX infrastructure. As SpaceX advances Starship flights, Starlink expansion, and ambitious Mars goals under Elon Musk, Google’s stake positions it to benefit from the commercialization of space.
For Alphabet, the windfall highlights how patient, forward-looking bets in transformative sectors can yield outsized rewards. While lockups temper short-term impact, the holding cements SpaceX as a cornerstone of Alphabet’s diversified portfolio in an era where aerospace, AI, and connectivity increasingly intersect. Investors will watch closely as restrictions lift and SpaceX’s public performance unfolds.
Tesla’s Supercharger Diner probably just secured more locations
Tesla short sellers win big after shares fall after earnings
