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Tesla and EV-only carmakers are legacy auto’s karma for killing the electric car
Karma could be a cruel mistress. It has a tendency to sneak up from behind before delivering a cruel haymaker to the jaw. Karma takes a while to rev up sometimes, but when it comes, things change, and sometimes these changes can be painful. Considering the state of the auto market, as well as the momentum carried by companies like Tesla, Lucid Motors, and Rivian, it appears that legacy carmakers are finally dealing with some well-deserved karma — for killing the electric car.
The general death of EVs amidst the emergence of the internal combustion engine during the early days of automobiles is understandable. Back then, fossil fuels presented a cheap, efficient way to travel, with vehicles like the Baker Electric and the Porsche P1 taking a very long time to charge. However, the death of the electric car that happened in the late 90s was something that is far more difficult to justify.
During the mid-90s, a modern electric vehicle was created by General Motors, and it could have been the driving force of a change in the motoring world. The vehicle, dubbed the EV1, was on the bleeding edge of tech at the time, with its three-phase alternating current induction motor and lead-acid (later changed to NiMH) battery. It had enough range for inner-city travel, it was fast, and it was sleek. But inasmuch as it was beloved by those who leased it, the EV1 was fated to meet an unfortunate demise.
In a series of events that inspired the creation of the documentary “Who Killed the Electric Car,” General Motors decided to discontinue the EV1, reclaiming the car from the leasees and destroying the vehicles. Segments of the acclaimed documentary depicted customers asking GM if they could just purchase the all-electric car, with some even holding demonstrations for the EV. But despite all these efforts, GM let the EV1 die, and most, save for a few, were unceremoniously crushed.
There were many speculations surrounding the EV1’s demise. General Motors insisted that the vehicle was not commercially viable. But the trend of large, gas-guzzling SUVs that followed the EV1 in GM’s lineup contributed to rumors that the electric car was killed because it represented a potential threat to the fossil fuel industry. In a sense, the electric car did die a painful, crushing death in the 90s, and it was not until Tesla came to the picture that EVs emerged as viable alternatives to gas-powered cars once more.
And it’s not like there was no resistance to the emergence of electric cars like Tesla, either. Tesla faced and continues to face strong opposition, and if it weren’t for its dedicated team and Elon Musk’s own stubbornness and resilience, the company could have followed the same fate as the EV1. But with vehicles like the Model S changing the game and cars like the Model 3 disrupting vehicle classes that used to be dominated by the internal combustion engine, it eventually became evident that this time around, it will be far more difficult to kill the electric car.
Amidst the success of companies like Tesla, even legacy automakers are playing catch up. Vehicles like the Jaguar I-PACE and the Chevy Bolt EV are representations of this. But even with these efforts, the pace of innovation in the electric vehicle segment is fast. Companies like Tesla work like tech companies, failing fast and failing forward. And now, legacy auto does not only have Tesla to contend with. Other premier electric cars from companies that are EV-only are coming. Tesla may have put EVs back on the map, but now, more companies are joining the fray.
There’s Lucid Motors with the Air, a hyper-luxury sedan that would likely put the Mercedes S-Class in its place. There’s the Rivian R1T and R1S, which bring luxury and comfort even in places off the beaten path. Even Bollinger Motors is attacking a small niche of rock-crawling vehicles with its no-nonsense, rough-and-tough B1 and B2. These are only the tip of the iceberg as well. Veteran auto is even getting increasingly dedicated to EVs, as evidenced by Porsche’s decision to revamp its entire factory in Zuffenhausen just to get the company ready for more electric vehicles like the Taycan.
It appears that this time around, killing the electric car will not be as simple or easy as before. Unlike the early 1900s, EVs now charge fast and they go the distance, and unlike the 90s, electric cars are now being embraced by mainstream consumers. There’s a demand for them, and EVs are now being noted for their performance. Electric cars are here to stay, and every single one that gets released is additional karma to an auto industry that appears to have dug itself far too deep into fossil fuels.
Tesla has upgraded the Model Y’s two most affordable trims, the Rear-Wheel-Drive and All-Wheel-Drive, with two new interior features that bring them level with their “Premium” siblings.
The Rear-Wheel-Drive (RWD) and All-Wheel-Drive (AWD) trims, formerly known as the “Standard” offerings of Tesla’s most popular vehicle, are now fitted with the all-black headliner and a higher-quality 16-inch center screen, two features that were added to the Premium trims earlier this year.
Here’s what the new Black Headliner looks like compared to the old design in the Model Y RWD and AWD: https://t.co/vaMUZz30UC pic.twitter.com/i1yXjJNu7L
— TESLARATI (@Teslarati) June 5, 2026
The RWD and AWD trims of the Model Y now have a more premium interior feel with these upgrades, and it also appears to be a move by Tesla to streamline manufacturing by eliminating variance across configuration levels.
It makes production less complicated when the interior colors are all identical. Additionally, all Model Y builds now have the larger and higher-resolution screen than previous model years.
Priced at $39,990 and $41,990, respectively, the Model Y RWD and AWD are quite different from the Premium trims. Tesla aimed to make an affordable version of what has been the best-selling car in the world on several occasions, enabling more accessibility.
The differences from an interior standpoint are noticeable, as there is significantly less storage, a lack of A/C seats, and no glass roof. However, the car is still a great option and features a good powertrain, strong range ratings of 321 miles for the RWD and 294 miles for the AWD, and a great ride quality.
Tesla Model Y Standard Full Review: Is it worth the lower price?
Other shortcomings are the lack of acoustic-lined windows, which are featured in the Premium trims to help with excess cabin noise. In our testing of the Model Y Standard back in late 2025, this was perhaps the most noticeable difference between it and the Premium trim. The stereo was also a huge difference:
This now includes the Model Y RWD and AWD, the two trims that were formerly know as “Standard”
You can see what the big differences are between the RWD/AWD and the Premium below:
https://t.co/ptLnm95KjX https://t.co/vaMUZz30UC pic.twitter.com/scuRNErXoC
— TESLARATI (@Teslarati) June 5, 2026
The RWD and AWD trims of the Model Y are still a great vehicle at an affordable price, and you can experience them for yourself at your local Tesla showroom. Test drives are always available, and it’s a great way to experience an EV for yourself, especially if you have no knowledge about them.
Tesla has its answer to grow its automotive sales over the next few years, TD Cowen analyst Itay Michaeli says, but it just has to bring it to the U.S.
On Thursday, Michaeli reiterated his $490 price target and the ‘Buy’ rating he already held on Tesla stock (NASDAQ: TSLA). However, its automotive division has struggled to show sequential growth over the past few years, mostly due to its focus on AI and Full Self-Driving. Tesla already axed two of its lower-volume vehicles with the Model S and Model X earlier this year.
However, Tesla does not need to engineer an entire new vehicle to trigger an upward tick in sales; it just has to bring it from China to the U.S., Michaeli said.
He is talking about the Model Y L, a slightly larger version of the all-electric crossover that is already available in China. U.S. customers have been pleading with CEO Elon Musk to bring it to the country since its launch in Asia last year, but he’s not convinced of it because of the advent of self-driving and its importance in this particular market.
The problem is that Tesla owners have been requesting something larger that could fit a typical American family. The Model Y L is slightly larger than the standard Model Y, but some are concerned that it could still be too small to fit what most people might need.
Instead, they have asked for a full-size SUV from Tesla.
Tesla gives big hint that it will build Cyber SUV, smaller Cybertruck
Nevertheless, the Model Y L still presents a great opportunity for Tesla in the U.S., and Michaeli says that there is an additional sales opportunity of about 100,000 units, with demand potential falling somewhere between 60,000 and 135,000 units.
TD Cowen’s note to investors also analyzed that Tesla’s growth could come from a stock perspective as well, positively impacting the stock price, as it has been widely reliant on vehicle sales, even though Tesla has truly phased itself away from that being an important metric.
Tesla stands to gain greatly from the introduction of the Model Y L in the U.S., but only if Elon Musk sees it as a viable fit for the market. Families may need to see Tesla bring something larger to the U.S., or they might be forced to buy from another automaker that offers something that fits is needs for more interior space to haul around the kids.
Tesla Hardware 3 owners are set to get a new Full Self-Driving version this month as the company plans to release what it is referring to as v14 Lite.
The rollout is not yet confirmed for June, but Tesla executives have stated on several occasions that this more refined FSD iteration will work with their cars and increase its capabilities.
This comes after Tesla admitted during its last Earnings Call that these Hardware 3 vehicles would not be able to achieve Full Self-Driving, something that they did not know when they bought these cars. We regularly receive messages from Hardware 3 owners asking when v14 Lite will come out, what they should expect, and whether it is worth it to upgrade the self-driving computer or buy a new car altogether.
Following future rollout of FSD V14 Lite for HW3 vehicles in the US, we plan on expanding V14 Lite to additional international markets.
This update ensures that HW3 vehicle owners will continue to benefit from ongoing software updates.
Since international rollout is subject to…
— Tesla (@Tesla) April 29, 2026
It is hard not to feel for them; Tesla CEO Elon Musk said at the company’s 2019 Autonomy Day that all vehicles produced at the time, including Hardware 3 cars, had “all the hardware necessary, compute and otherwise, for Full Self-Driving.”
Musk also said in March of that year that, “Anyone who purchased Full Self-Driving will get FSD computer upgrade for free.”
Anyone who purchased full self-driving will get FSD computer upgrade for free. This is the only change between Autopilot HW2.5 & HW3. Going forward “HW3” will just be called FSD Computer, which is accurate. No change to vehicle sensors or wire harness needed. This is v important. https://t.co/lICMpT7xnX
— Elon Musk (@elonmusk) March 29, 2019
However, during the Q1 2026 Earnings Call, Musk admitted that Hardware 3 vehicles would not be capable of FSD, as “It has only 1/8th the memory bandwidth of Hardware 4, and memory bandwidth is one of the key elements needed for unsupervised FSD.”
Tesla has made some effort to remedy these Hardware 3 owners by offering:
- Discounted trade-ins toward AI4 cars
- Hardware retrofits, which would replace the self-driving computer and upgrade all cameras
- Full Self-Driving v14 Lite
The issue is that many of these owners were led to believe their cars would be capable of unsupervised self-driving. Now, they’re left scrambling for options, and while there are several, they will all require more money out of their pockets.
Expectations for Tesla v14 Lite for Hardware 3 Owners
The big differences between the AI4 v14 and v14 Lite for Hardware 3 owners will stem primarily from hardware constraints. Tesla developed v14 Lite with an optimized frame of mind; the v14 neural nets are toned down to run on an HW3 computer.
Tesla v14 will use the same behavior, but its limits will be hardware-related, especially given that the cameras on HW3 vehicles are lower-resolution.
Tesla reveals its plans for Hardware 3 owners who are eager for updates
This will result in potentially more edge cases due to the lower quality perception and less long-range detection, but reaction time and overall confidence should be more refined.
There should also be a handful of additional features that are available on AI4 cars, such as:
- Starting Full Self-Driving from Park
- Auto Shift
- Streaks
- Speed Profiles
- Improved Dynamics, like Pulling Over for Emergency Vehicles
Tesla plans to release v14 Lite this month, but we are all familiar with how the company can be with timelines. Additionally, if v14 Lite has not proven to be ready for a wide release, Tesla will slam the brakes on the rollout.
We would anticipate that Tesla is testing v14 Lite internally, and likely has been for several months.
Tesla upgrades Model Y’s affordable trims with new interior features
Tesla has its answer to auto growth, it just has to bring it to the U.S.: analyst
