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Tesla faces biggest challenge yet as oil industry fights to maintain its hold on US auto

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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.

A Tesla Model 3 being assembled in Fremont, CA. (Photo: Tesla)

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.”

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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.

Rivian’s R1T all-electric luxury pickup truck (Photo: Rivian)

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.

Tesla’s Fremont factory, where all Model 3 are produced. (Photo: Tesla)

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.

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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.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla CEO Elon Musk trolls budget airline after it refuses Starlink on its planes

“I really want to put a Ryan in charge of Ryan Air. It is your destiny,” Musk said.

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Tesla CEO Elon Musk trolled budget airline Ryanair on his social media platform X this week following the company’s refusal to adopt Starlink internet on its planes.

Earlier this week, it was reported that Ryanair did not plan to install Starlink internet services on its planes due to its budgetary nature and short flight spans, which are commonly only an hour or so in total duration.

Initially, Musk said installing Starlink on the company’s planes would not impact cost or aerodynamics, but Ryanair responded on its X account, which is comical in nature, by stating that a propaganda it would not fall for was “Wi-Fi on planes.”

Musk responded by asking, “How much would it cost to buy you?” Then followed up with the idea of buying the company and replacing the CEO with someone named Ryan:

Polymarket now states that there is an 8 percent chance that Musk will purchase Ryanair, which would cost Musk roughly $36 billion, based on recent financial data of the public company.

Although the banter has certainly crossed a line, it does not seem as if there is any true reason to believe Musk would purchase the airline. More than anything, it seems like an exercise of who will go further.

Starlink passes 9 million active customers just weeks after hitting 8 million

However, it is worth noting that if something is important enough, Musk will get involved. He bought Twitter a few years ago and then turned it into X, but that issue was much larger than simple banter with a company that does not want to utilize one of the CEO’s products.

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In a poll posted yesterday by Musk, asking whether he should buy Ryanair and “restore Ryan as their rightful ruler.” 76.5 percent of respondents said he should, but others believe that the whole idea is just playful dialogue for now.

But it is not ideal to count Musk out, especially if things continue to move in the direction they have been.

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Tesla Robotaxi’s biggest rival sends latest statement with big expansion

The new expanded geofence now covers a broader region of Austin and its metropolitan areas, extended south to Manchaca and north beyond US-183.

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Credit: @AdanGuajardo/X

Tesla Robotaxi’s biggest rival sent its latest statement earlier this month by making a big expansion to its geofence, pushing the limits up by over 50 percent and nearing Tesla’s size.

Waymo announced earlier this month that it was expanding its geofence in Austin by slightly over 50 percent, now servicing an area of 140 square miles, over the previous 90 square miles that it has been operating in since July 2025.

Tesla CEO Elon Musk shades Waymo: ‘Never really had a chance’

The new expanded geofence now covers a broader region of Austin and its metropolitan areas, extended south to Manchaca and north beyond US-183.

These rides are fully driverless, which sets them apart from Tesla slightly. Tesla operates its Robotaxi program in Austin with a Safety Monitor in the passenger’s seat on local roads and in the driver’s seat for highway routes.

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It has also tested fully driverless Robotaxi services internally in recent weeks, hoping to remove Safety Monitors in the near future, after hoping to do so by the end of 2025.

Although Waymo’s geofence has expanded considerably, it still falls short of Tesla’s by roughly 31 square miles, as the company’s expansion back in late 2025 put it up to roughly 171 square miles.

There are several differences between the two operations apart from the size of the geofence and the fact that Waymo is able to operate autonomously.

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Waymo emphasizes mature, fully autonomous operations in a denser but smaller area, while Tesla focuses on more extensive coverage and fleet scaling potential, especially with the potential release of Cybercab and a recently reached milestone of 200 Robotaxis in its fleet across Austin and the Bay Area.

However, the two companies are striving to achieve the same goal, which is expanding the availability of driverless ride-sharing options across the United States, starting with large cities like Austin and the San Francisco Bay Area. Waymo also operates in other cities, like Las Vegas, Los Angeles, Orlando, Phoenix, and Atlanta, among others.

Tesla is working to expand to more cities as well, and is hoping to launch in Miami, Houston, Phoenix, Las Vegas, and Dallas.

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Tesla automotive will be forgotten, but not in a bad way: investor

It’s no secret that Tesla’s automotive division has been its shining star for some time. For years, analysts and investors have focused on the next big project or vehicle release, quarterly delivery frames, and progress in self-driving cars. These have been the big categories of focus, but that will all change soon.

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(Credit: Tesla)

Entrepreneur and Angel investor Jason Calacanis believes that Tesla will one day be only a shade of how it is recognized now, as its automotive side will essentially be forgotten, but not in a bad way.

It’s no secret that Tesla’s automotive division has been its shining star for some time. For years, analysts and investors have focused on the next big project or vehicle release, quarterly delivery frames, and progress in self-driving cars. These have been the big categories of focus, but that will all change soon.

I subscribed to Tesla Full Self-Driving after four free months: here’s why

Eventually, and even now, the focus has been on real-world AI and Robotics, both through the Full Self-Driving and autonomy projects that Tesla has been working on, as well as the Optimus program, which is what Calacanis believes will be the big disruptor of the company’s automotive division.

On the All-In podcast, Calcanis revealed he had visited Tesla’s Optimus lab earlier this month, where he was able to review the Optimus Gen 3 prototype and watch teams of engineers chip away at developing what CEO Elon Musk has said will be the big product that will drive the company even further into the next few decades.

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Calacanis said:

“Nobody will remember that Tesla ever made a car. They will only remember the Optimus.”

He added that Musk “is going to make a billion of those.”

Musk has stated this point himself, too. He at one point said that he predicted that “Optimus will be the biggest product of all-time by far. Nothing will even be close. I think it’ll be 10 times bigger than the next biggest product ever made.”

He has also indicated that he believes 80 percent of Tesla’s value will be Optimus.

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Optimus aims to totally revolutionize the way people live, and Musk has said that working will be optional due to its presence. Tesla’s hopes for Optimus truly show a crystal clear image of the future and what could be possible with humanoid robots and AI.

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