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Tesla faces biggest challenge yet as oil industry fights to maintain its hold on US auto
Tesla might have overcome several notable hurdles this year, but the electric car maker is now facing what could very well be its biggest challenge yet in the United States. As the company hits its stride with the production of the Model 3 and as it prepares to ramp its energy business next year, a rather discreet movement is underway to ensure that America remains waist-deep in oil.
A recent expose published by The New York Times outlines an active campaign to roll back the country’s existing vehicle emissions rules. Earlier this year, the US government laid out a plan that aims to ease fuel efficiency standards in the country. The movement’s central point is simple — since America is so awash in oil, the country no longer needs to worry about energy conservation.
The publication’s investigation noted that the movement, which was supported by proposals in Congress and social media campaigns, is backed by some of the United States’ largest oil interests. Marathon Petroleum, the US’ largest refiner, as well as a policy network with ties to billionaire Charles G. Koch, contributed to help push the movement’s agenda. Overall, the creation of the proposal and its support from the oil industry is understandable, considering that the advent of electric vehicles threatens the bottom line of the industry. Less gas-thirsty cars on the road mean lower sales of gasoline. More pure electric vehicles on the road, such as Tesla’s electric cars, are an even bigger threat.
The US government’s initiative takes aim at the country’s emissions standards, which practically requires automakers to double the fuel efficiency of their vehicles by 2025. Under the government’s proposal, emissions standards would be frozen at 2020 levels. The NYT estimates that if the government’s planned rollback is implemented, it would increase greenhouse gas emissions in the United States by more than the amount of gases put out by midsize countries such as Austria, Greece, or Bangladesh in one year.

Lawmakers and delegations across the United States have backed the pro-oil campaign, with several groups sending letters to the Transportation Department to express their support. The publication noted that these letters featured much of the same phrasing, particularly a line directly referencing the preferences of American car buyers. “With oil scarcity no longer a concern, historically low gas prices, increasingly ambitious CAFE requirements, it is important that NHTSA and EPA review the mandate to ensure that the US is protecting consumers from higher costs and still allowing for choice in vehicles that best fit their needs,” one of the letters stated.
The oil-backed movement, though, is currently encountering some pushback from members of the government. Among these is Senator Tom Carper of Delaware, who expressed his criticism of the administration’s campaign. In a statement to the NYT, Carper noted that “oil interests are cynically trying to gin up support in Congress for the weakest possible standards to ensure that cars and SUVs have to rely on even more oil.” The senator added that “If this attempt is successful, the outcome will be a blow to the auto industry, consumers, and our environment.”
At the forefront of the resistance against the oil-backed campaign is California, home to Tesla’s headquarters and electric car factory. California pledged to stick to stricter emissions standards while maintaining an initiative to push the adoption of zero-emissions vehicles. Thirteen states currently follow CA’s lead, representing about 35% of the United States’ nationwide car sales.
At the heart of the movement is the notion that American car buyers prefer large, gas-guzzling vehicles such as full-sized pickup trucks and SUVs over zero-emissions vehicles. This is a market barely touched by electric car makers today, with cars such as the Tesla Model X competing in the luxury SUV segment — a far smaller and notably higher-priced market than those populated by gas-powered best-sellers such as the Chevrolet Suburban. The same is true for the pickup truck market, which is home to the Ford F-150, the country’s best-selling vehicle. Serious all-electric pickup trucks such as Rivian’s R1T have been unveiled recently, but just like the Model X, the R1T is a luxury vehicle at its core.

Tesla has matured greatly this year, as the company overcame the Model 3’s production hell and as Elon Musk dealt with the repercussions of his online behavior. Considering the pro-oil movement stirring in the country, though, Tesla might need to take even greater responsibilities in the immediate future. Being a first mover in the electric car revolution, Tesla has the potential to take the lead in bringing compelling vehicles that can compete with gasoline-powered cars on both performance and price. The company is already accomplishing this with the Model 3, as proven by the electric sedan’s impressive sales figures over the past months. So far, though, Tesla is yet to release vehicles that can truly take on the country’s gas guzzlers at a similar price point.
This might change next year, as Tesla is expected to reveal the Model Y SUV. The Model Y is designed to be the SUV counterpart of the Model 3 — powerful, practical, and attainable by the everyman — and if Elon Musk’s recent statements are any indication, the vehicle’s unveiling could be just around the corner. Tesla could very well be targeting the mainstream, seven-seat SUV market with the Model Y, with Musk recently describing the vehicle as a “midsize SUV” during an appearance at the Recode Decode podcast. Musk has also indicated that Tesla might be releasing its pickup truck earlier than expected.
Tesla, though, is not capable of pushing the EV revolution alone. Thus, it is pertinent for EV startups such as Rivian and Bollinger Motors to step up to the challenge and perhaps accelerate the development and release of their electric vehicles. Legacy automakers that have committed to an electrified future, such as Porsche and Jaguar, must expedite the release of compelling zero-emissions cars as well. Porsche and Jaguar have already taken a notable step with the Taycan and the I-PACE, but far more steps need to be taken.

For its part, Tesla would best be served by a steadier hand in the coming quarters. With an aggressive campaign to keep the United States entrenched in oil ongoing, Tesla must lead in a manner that is quick, efficient, and steady. Thus, mistakes such as the over-automation of the Model 3 assembly line, as well as Elon Musk’s Twitter gaffes, should best be avoided. Tesla is already a fast-evolving company, having grown to a major automaker in all but 15 years. Considering the presence of the government’s oil-backed campaign, though, Tesla is at a point where it must evolve even faster than before.
For now, the US’ auto industry appears to be facing a crossroads. On the one hand, there are companies such as Tesla proving that electric cars such as the Model 3 are viable and competitive. On the other hand, there are groups lobbying to maintain the auto industry’s reliance on oil. If a recent public hearing in Colorado is any indication, though, it appears that support for sustainable transportation is very much present.
Last month, Americans for Prosperity representative Shari Shiffer-Krieger attended a public hearing about Colorado’s pending decision to follow California’s lead. Americans for Prosperity is among the oil industry’s supporters. In Iowa, the group joined the fight against an initiative that would make it easier for gas stations to install electric car charging stations, and in Illinois, the group discouraged state officials from considering subsidies for EVs. Speaking to Colorado’s regulators, Shiffer-Krieger argued that buyers in the rugged state preferred powerful SUVs over stricter emissions rules.
“Coloradans deserve much better,” she said.
Colorado’s regulators accommodated her, before allying themselves with California.
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Tesla partners with Lemonade for new insurance program
Tesla recently was offered “almost free” coverage for Full Self-Driving by Lemonade’s Shai Wininger, President and Co-founder, who said it would be “happy to explore insuring Tesla FSD miles for (almost) free.”
Tesla owners in California, Oregon, and Arizona can now use Lemonade Insurance, the firm that recently said it could cover Full Self-Driving miles for “almost free.”
Lemonade, which offered the new service through its app, has three distinct advantages, it says:
- Direct Connection for no telematics device needed
- Better customer service
- Smarter pricing
The company is known for offering unique, fee-based insurance rates through AI, and instead of keeping unclaimed premiums, it offers coverage through a flat free upfront. The leftover funds are donated to charities by its policyholders.
On Thursday, it announced that cars in three states would be able to be connected directly to the car through its smartphone app, enabling easier access to insurance factors through telematics:
Lemonade customers who own @Tesla vehicles in California, Oregon, and Arizona can now connect their cars directly to the Lemonade app! ⚡🚘
Direct connection = no telematics device needed 📵
Better customer experience 💃
Smarter pricing with Lemonade 🧠This is a game-changer… pic.twitter.com/jbabxZWT4t
— Lemonade (@Lemonade_Inc) December 11, 2025
Tesla recently was offered “almost free” coverage for Full Self-Driving by Lemonade’s Shai Wininger, President and Co-founder, who said it would be “happy to explore insuring Tesla FSD miles for (almost) free.”
The strategy would be one of the most unique, as it would provide Tesla drivers with stable, accurate, and consistent insurance rates, while also incentivizing owners to utilize Full Self-Driving for their travel miles.
Tesla Full Self-Driving gets an offer to be insured for ‘almost free’
This would make FSD more cost-effective for owners and contribute to the company’s data collection efforts.
Data also backs Tesla Full Self-Driving’s advantages as a safety net for drivers. Recent figures indicate it was nine times less likely to be in an accident compared to the national average, registering an accident every 6.36 million miles. The NHTSA says a crash occurs approximately every 702,000 miles.
Tesla also offers its own in-house insurance program, which is currently offered in twelve states so far. The company is attempting to enter more areas of the U.S., with recent filings indicating the company wants to enter Florida and offer insurance to drivers in that state.
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Tesla Model Y gets hefty discounts and more in final sales push
Tesla Model Y configurations are getting hefty discounts and more benefits as the company is in the phase of its final sales push for the year.
Tesla is offering up to $1,500 off new Model Y Standard trims that are available in inventory in the United States. Additionally, Tesla is giving up to $2,000 off the Premium trims of the Model Y. There is also one free upgrade included, such as a paint color or interior color, at no additional charge.
NEWS: Tesla is now offering discounts of up to $1,500 off new Model Y Standard vehicles in U.S. inventory. Discounts of up to $2,000 are also being offered on Model Y Premiums.
These discounts are in addition to the one free upgrade you get (such as Diamond Black paint) on… pic.twitter.com/L0RMtjmtK0
— Sawyer Merritt (@SawyerMerritt) December 10, 2025
Tesla is hoping to bolster a relatively strong performance through the first three quarters of the year, with over 1.2 million cars delivered through the first three quarters.
This is about four percent under what the company reported through the same time period last year, as it was about 75,000 vehicles ahead in 2024.
However, Q3 was the company’s best quarterly performance of all time, and it surged because of the loss of the $7,500 EV tax credit, which was eliminated in September. The imminent removal of the credit led to many buyers flocking to Tesla showrooms to take advantage of the discount, which led to a strong quarter for the company.
2024 was the first year in the 2020s when Tesla did not experience a year-over-year delivery growth, as it saw a 1 percent slide from 2023. The previous years saw huge growth, with the biggest coming from 2020 to 2021, when Tesla had an 87 percent delivery growth.
This year, it is expected to be a second consecutive slide, with a drop of potentially 8 percent, if it manages to deliver 1.65 million cars, which is where Grok projects the automaker to end up.
Tesla will likely return to its annual growth rate in the coming years, but the focus is becoming less about delivery figures and more about autonomy, a major contributor to the company’s valuation. As AI continues to become more refined, Tesla will apply these principles to its Full Self-Driving efforts, as well as the Optimus humanoid robot project.
Will Tesla thrive without the EV tax credit? Five reasons why they might
These discounts should help incentivize some buyers to pull the trigger on a vehicle before the year ends. It will also be interesting to see if the adjusted EV tax credit rules, which allowed deliveries to occur after the September 30 cutoff date, along with these discounts, will have a positive impact.
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Tesla FSD’s newest model is coming, and it sounds like ‘the last big piece of the puzzle’
“There’s a model that’s an order of magnitude larger that will be deployed in January or February 2026.”
Tesla Full Self-Driving’s newest model is coming very soon, and from what it sounds like, it could be “the last big piece of the puzzle,” as CEO Elon Musk said in late November.
During the xAI Hackathon on Tuesday, Musk was available for a Q&A session, where he revealed some details about Robotaxi and Tesla’s plans for removing Robotaxi Safety Monitors, and some information on a future FSD model.
While he said Full Self-Driving’s unsupervised capability is “pretty much solved,” and confirmed it will remove Safety Monitors in the next three weeks, questions about the company’s ability to give this FSD version to current owners came to mind.
Musk said a new FSD model is coming in about a month or two that will be an order-of-magnitude larger and will include more reasoning and reinforcement learning.
He said:
“There’s a model that’s an order of magnitude larger that will be deployed in January or February 2026. We’re gonna add a lot of reasoning and RL (reinforcement learning). To get to serious scale, Tesla will probably need to build a giant chip fab. To have a few hundred gigawatts of AI chips per year, I don’t see that capability coming online fast enough, so we will probably have to build a fab.”
NEWS: Elon Musk says FSD Unsupervised is “pretty much solved at this point” and that @Tesla will be launching Robotaxis with no safety monitors in about 3 weeks in Austin, Texas. He also teased a new FSD model is coming in about 1-2 months.
“We’re just going through validation… https://t.co/Msne72cgMB pic.twitter.com/i3wfKX3Z0r
— Sawyer Merritt (@SawyerMerritt) December 10, 2025
It rings back to late November when Musk said that v14.3 “is where the last big piece of the puzzle finally lands.”
With the advancements made through Full Self-Driving v14 and v14.2, there seems to be a greater confidence in solving self-driving completely. Musk has also personally said that driver monitoring has been more relaxed, and looking at your phone won’t prompt as many alerts in the latest v14.2.1.
This is another indication that Tesla is getting closer to allowing people to take their eyes off the road completely.
Along with the Robotaxi program’s success, there is evidence that Tesla could be close to solving FSD. However, it is not perfect. We’ve had our own complaints with FSD, and although we feel it is the best ADAS on the market, it is not, in its current form, able to perform everything needed on roads.
But it is close.
That’s why there is some legitimate belief that Tesla could be releasing a version capable of no supervision in the coming months.
All we can say is, we’ll see.