Investor's Corner
‘Tesla Killer’ myth debunked by TSLA skeptic: Model 3 faces ‘no credible competition’ until 2020
Tesla stock (NASDAQ:TSLA) seems to be in the process of recovering from Tuesday’s dive over reports of the US Department of Justice’s probe into Elon Musk’s “funding secured” tweet last month, but the company’s most ambitious vehicle — the Model 3 — continues to impress even longtime skeptics. In a recent note, Toni Sacconaghi of Bernstein, who is known to be critical of Tesla in the past, stated that there is simply “no credible competition” for the Model 3 until 2020.
According to Sacconaghi, Bernstein has looked into the upcoming electric cars from several automakers set to arrive in the US within the coming years. In the case of the Model 3, the analyst pointed out that the vehicle would likely be unrivaled until 2020, when Volvo releases its all-electric Polestar 2 sedan.
“But let’s make this clear: there is no actual flood of competition coming. We tallied up every announced electric vehicle arriving in the U.S. between now and 2022, and the results were stark. The Model 3, which will account for 70% of Tesla’s revenues within two years, faces no credible competition whatsoever until 2020, or until Volvo AB launches its all-electric Polestar 2 sedan,” the Bernstein analyst noted.
Sacconaghi’s note also stated that the Tesla Model S and the Tesla Model X would likely be unrivaled until 2020 as well, as the vehicles will only be facing two competitors, the Audi e-tron Quattro and the Jaguar- I-PACE. Ultimately, the analyst noted that instead of hampering Tesla, the release of electric cars from incumbent automakers would most probably “validate and expand the existing market for electric cars.” Sacconaghi further stated that even the Chevy Bolt, which was once perceived as a “Tesla Killer,” does not really rival the Model 3.
“While matching the range and price point of the Model 3, the Bolt arguably remains a lower-end car, without the luxury nameplate, the styling, the performance, or even the electronics offered by Tesla. A side-by-side comparison in real life makes the contrast particularly stark – for one thing, the Bolt is a whole 20 inches shorter than the Model 3. GM has been relatively mum on its specific electric vehicle plans going forward, but we do not expect it to sell clear competitors to the Model 3 anytime within the next 3 years,” the analyst noted.
Toni Sacconaghi is hardly a Tesla enthusiast. Back in July, the analyst released a note expressing his reservations about the Model 3’s long-term profitability. Sacconaghi’s questions during Tesla’s Q1 2018 earnings call incited Elon Musk’s now-infamous outburst as well, with the CEO dubbing his inquiry as “boring” and “boneheaded.”
As other carmakers reveal their own entries into the all-electric market, Tesla’s experience in creating compelling EVs is starting to become evident. Thus, Sacconaghi is not alone in his observations. After Audi’s reveal of the e-tron, longtime Tesla skeptic Patrick Hummel from UBS Group AG — the same group which alleged that the $35,000 base Model 3 would not be profitable — admitted that the performance and specs of rival vehicles from veteran carmakers like Mercedes-Benz and Audi shows that Tesla would likely maintain its lead in the premium electric car market for a bit longer.
Since its steep dive on Tuesday, Tesla stock is starting a seemingly steady trek back up. As of writing, Tesla stock is trading up 1.63% at $289.61 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Tesla and SpaceX merger talks hit a new stage, and one hurdle remains
Tesla and SpaceX merger talks are reportedly advancing, and a deal could arrive by December.
Tesla and SpaceX are moving closer to a combination, with a deal announcement possible as soon as December, Bloomberg reported on Thursday, citing people familiar with the matter. The companies have also discussed a scenario in which the announcement slips into early 2027.
Boards and advisers on both sides are now working through the terms of the deal and the governance structure of the combined company, according to the report. One open item is how many SpaceX shares Tesla investors would receive. Bloomberg had previously reported that the two companies were aiming to announce a deal in the first half of next year and close it before the end of President Donald Trump’s term, so a December announcement would pull that schedule forward by months.
Tesla shares rose as much as 1.9% to $398.35 after the report, while SpaceX gained 0.6% to $140.63. SpaceX carries a market value of about $1.9 trillion following its June IPO, and Tesla is valued at about $1.55 trillion, which would make a combination the largest corporate deal on record. Neither company responded to requests for comment.
The talks became official on October 20, when Elon Musk said on SpaceX’s third quarter earnings call that both companies had formed special committees of independent directors to study a merger, as Teslarati reported. Musk said he could not take part because he is “a conflicted party” and called the process “an odd kabuki dance.” He also noted that Tesla would need approval from 50 percent of all outstanding shares, a bar the company missed in 2025 when a board declassification proposal won support from only 39.4 percent.
China remains the biggest structural problem. Bloomberg’s sources said the companies still need to work out how to isolate Tesla’s large and profitable manufacturing business in China from SpaceX’s U.S. government and defense contracts. JPMorgan analyst Rajat Gupta described those two factors last month as “key dynamics that are at odds with each other” for regulatory and shareholder approval. Musk has repeatedly said Tesla has no plans to separate its China business, a position he restated in August after ARK Invest predicted a merger announcement before the end of the year.
Washington adds another layer. Democrats took control of Congress in this month’s midterms and have pledged to investigate Musk’s business and political activities, which could bring added scrutiny to a deal involving one of the Pentagon’s most important launch and satellite contractors.
The report also lands three weeks before Tesla’s December 3 annual meeting at Giga Texas. That ballot has only three items, led by the re-election of Musk, board chair Robyn Denholm and JB Straubel, and includes no merger proposal. Any deal announced in December would likely require a separate special meeting for Tesla shareholders to vote on it.
The two companies already share a growing list of projects, including the Terafab semiconductor plant in Texas. Tesla’s next generation Roadster, which uses cold gas thrusters built on SpaceX hardware, turned up on display at SpaceX headquarters last month and has become one of the clearest public examples of that overlap.
Elon Musk
Nvidia’s board meets on Jensen Huang, and Elon Musk already has an answer
Elon Musk says it would be an honor to hire Jensen Huang amid Nvidia turmoil.
Elon Musk says he would welcome Jensen Huang at one of his companies if Nvidia’s board decides to push out its longtime chief executive.
On Wednesday evening, the financial account ZeroHedge posted “Elon please hire Jensen” on X. Musk replied roughly two hours later: “That would be an honor.” Neither Huang nor Nvidia had responded publicly as of Wednesday night.
Musk’s reply came as Nvidia’s board met to decide Huang’s future. The Wall Street Journal reported that directors were preparing to oust him following reports of two extramarital relationships. One involves Alice Huang, a Singapore-based businesswoman whom U.S. intelligence officials reportedly believe was working for China’s Ministry of State Security. The New York Times separately reported a relationship with Kimberly Powell, Nvidia’s vice president of health care. Huang acknowledged being unfaithful in a memo to employees on Sunday but gave no details.
@zerohedge That would be an honor
— Elon Musk (@elonmusk) November 12, 2026
Under Nvidia’s bylaws, a majority of its 11 directors can remove the CEO with or without cause. Bloomberg reported that the board has been working with an outside firm on possible replacements and may name an interim chief, with CFO Colette Kress seen as the likely pick. Nvidia shares fell more than 8 percent in extended trading, according to CNBC, and the company is scheduled to report quarterly earnings on November 17.
Musk has more riding on Nvidia’s leadership than most tech executives. In August, he told investors on SpaceX’s first earnings call as a public company that it would build its AI infrastructure exclusively on Nvidia hardware, calling Vera Rubin “the best architecture.” SpaceX is also working with Nvidia on the compute payload for Starmind, its planned orbital AI constellation. In October, SpaceX said it had a binding commitment for a roughly $40 billion lease of Vera Rubin GPUs and related equipment, with the leases expected to begin in the first half of 2027.
The scale of that dependence is already enormous. On its Q3 call, SpaceX said it was bringing roughly 200,000 to 220,000 Nvidia GB300 GPUs online each month and expects 2.5 to 3 GW of nameplate compute by the end of the year. That buildout is now reaching new sites like the proposed $24 billion power plant and supercomputer campus at Starbase.
The relationship between the two executives also goes back nearly a decade. Huang has often told the story of personally delivering Nvidia’s first DGX-1 AI supercomputer to Musk in 2016, when no other customer wanted one. “Nobody wanted to be part of it, except for Elon,” Huang said on the Joe Rogan Experience last December.
Musk did not say what role Huang might fill, and his reply stops short of a formal offer. Huang co-founded Nvidia in 1993 and still owns about 3.6 percent of its stock, so any move to a Musk company would depend on whether, and how, he leaves the chipmaker he has run for more than three decades.
Elon Musk
SpaceX’s Anthropic deal has a catch, and Elon Musk just addressed it
Elon Musk says SpaceX’s Anthropic compute deal cuts both ways after Chamath floats higher prices.
Elon Musk pushed back on Sunday against the idea that SpaceX’s compute contract with Anthropic is a one way bet, after venture capitalist Chamath Palihapitiya argued the company could use a termination clause to charge the AI lab far more.
“It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop. No crying in the casino for either party,” Musk wrote on X Sunday evening, replying to a clip of Palihapitiya’s comments shared by AI commentator Rohan Paul.
On the All-In podcast released Sunday, Palihapitiya said either side can walk away from the agreement on 90 days’ notice. If data center supply tightens, he argued, SpaceX could exercise that option and bring the contract back at two to three times the current price, and Anthropic would have little choice but to accept. He called it “the kingmaking move,” according to BigGo Finance.
The clause itself is not new. SpaceX disclosed in its IPO filings in May that Anthropic would pay $1.25 billion per month for dedicated capacity at its Colossus clusters through May 2029, nearly $45 billion in total, with both companies able to terminate on 90 days’ notice, as Teslarati reported at the time. SpaceX’s later compute deals with Google and Reflection AI carry similar exit terms.
What has changed is the political backdrop. Palihapitiya’s thesis rests on incoming Democratic governors pulling tax incentives for data centers and slowing new construction. In Texas, Gov.-elect Gina Hinojosa campaigned on a moratorium on new data center approvals, and Deutsche Bank analysts warned last week that SpaceX’s Texas compute capacity could face delays. SpaceX and Tesla shares both fell after the midterm results.
A slowdown would favor companies that already own capacity. SpaceX acquired xAI in February and has been renting data centers to outside AI labs before the space is needed for Grok. At the Baron Investment Conference on Friday, Musk said SpaceX was “getting 50 billion a year for 35 billion dollar investments” and that it can bring a data center online in eight or nine months, compared to two and a half years for competitors. He also said SpaceX is tracking toward an annualized revenue rate above $100 billion in December, with a “best guess” of $500 billion by December 2027.
Musk’s reply points to the other side of the clause. Anthropic has signed large compute agreements with Amazon, Google and Microsoft, and if that capacity comes online faster than new construction slows, the AI lab would have its own leverage to renegotiate or leave. Musk has called Anthropic “obviously currently the leader in AI,” and it remains one of SpaceX’s largest compute customers.
SpaceX shares rose more than 2 percent in overnight trading late Sunday after closing Friday at $134.27, according to Stocktwits.