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Tesla’s Model 3 and the death of plug-in hybrids: ‘Full electric is a much more elegant solution’
Tesla took a big bet when it decided to launch the Model 3. Being a vehicle designed for the mass market, the sheer scale of the sedan’s production was something that Tesla has not dealt with before. It took more time than expected and a trip through “production hell,” but the Model 3 has now been ramped, with Elon Musk noting that producing 5,000 of the vehicles per week is currently no big deal for Tesla.
The market’s reception to the Model 3 has been encouraging. The vehicle has been performing well in the United States, ranking among America’s best-selling passenger cars. In September alone, the Model 3 became the 4th best-selling car in the US based on sales volume. Based on revenue, the Model 3 was even more impressive, ranking first among passenger cars sold in the country. Tesla does not seem to be planning on pulling back from its Model 3 push either, as the electric carmaker has started rolling out exhibits of the vehicle to Europe and Asia this month.
Amidst the evident success of the Model 3 and Elon Musk’s high-stakes bet on the electric sedan, another class of vehicles has begun to show notable signs of a decline — the plug-in hybrids. Plug-in hybrid electric vehicles (PHEV) are equipped with both an electric motor and an internal combustion engine. Popular cars in this class include the Chevy Volt, with its all-electric range of up to 53 miles, and a total range of 420 miles with a full battery and a full tank of gas.
PHEVs have mostly served as the “gateway” vehicles for customers looking to make the jump to electric transportation. Being equipped with a gasoline engine, owners need not worry about any of the initial drawbacks of pure EVs, such as limited range. Plug-in Hybrid and Electric Vehicle Research Center director Gil Tal noted to Bloomberg that in a way, PHEVs are like the “training wheels” of the electric car movement. That said, Tal noted that as practical, capable EVs like the Model 3 emerge, consumers might simply skip PHEVs and adopt all-electric cars instead.
“A full electric (car) is a much more elegant solution. It’s very simple to build and very low maintenance. It’s just a much more simple story. Plug-in hybrids are just the training wheels in the industry’s preparation for electric cars,” Tal said.
The death of plug-in hybrid electric vehicles became more real recently, with GM announcing that it was closing several of its plants across the United States and Canada. Among these plants was GM’s oldest factory at Detroit-Hamtramck, which produces the Volt. In a later statement, GM confirmed that it would be discontinuing the production of the Volt, with the company focusing on developing all-electric cars like the Bolt EV instead.
GM has announced that it is discontinuing the production of the Chevy Volt. [Credit: Chevrolet]
In a way, the apparent death of the PHEV seemed to have been predicted by Elon Musk eight years ago. In a statement to the media during the opening ceremony of the Fremont factory, Musk likened PHEVs to amphibians during the process of evolution. And just like amphibians, Musk noted that the number of PHEVs would likely decrease as the market moves into the full-electric era.
“(PHEVs are) similar to an amphibian. In the transition from the oceans to land, initially, there were a lot of amphibians. Now there’s not that many amphibians. So the only reason you’d ever need that gasoline engine is if the battery pack does not have enough range, if the recharge times are really slow, and all those things will get solved. So there’s a medium-term role for a plug-in hybrid, but in our view, not a long-term role. I think there’s a role for plug-in hybrids today and there’s a role for electrics, but I think long-term, it all goes electric.”
The seemingly impending death of the plug-in hybrid is not just the result of electric cars like Tesla’s Model S, 3, and X. Earlier this year, a Forbes report earlier this year noted that the efforts (or lack thereof) of manufacturers such as GM are partly to blame for the decline of PHEVs. Inasmuch as the Volt was warmly received by owners and well-reviewed by critics, for example, the vehicle remained a rare sight among GM’s dealerships across the United States. GM’s TV advertising campaigns have not featured the Volt, or its all-electric sibling, the Bolt EV, either.
That said, GM appears to be taking its EV initiative seriously this time around. Earlier this month, for one, VP of global strategy Mike Ableson boldly declared during a press conference that GM is looking to “lead the industry in EVs sometime in the next decade or so.” The next years will determine if these words will be true.
Elon Musk
SpaceX issues statement on Starship V3 Booster 18 anomaly
The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX has issued an initial statement about Starship Booster 18’s anomaly early Friday. The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX’s initial comment
As per SpaceX in a post on its official account on social media platform X, Booster 18 was undergoing gas system pressure tests when the anomaly happened. Despite the nature of the incident, the company emphasized that no propellant was loaded, no engines were installed, and personnel were kept at a safe distance from the booster, resulting in zero injuries.
“Booster 18 suffered an anomaly during gas system pressure testing that we were conducting in advance of structural proof testing. No propellant was on the vehicle, and engines were not yet installed. The teams need time to investigate before we are confident of the cause. No one was injured as we maintain a safe distance for personnel during this type of testing. The site remains clear and we are working plans to safely reenter the site,” SpaceX wrote in its post on X.
Incident and aftermath
Livestream footage from LabPadre showed Booster 18’s lower half crumpling around the liquid oxygen tank area at approximately 4:04 a.m. CT. Subsequent images posted by on-site observers revealed extensive deformation across the booster’s lower structure. Needless to say, spaceflight observers have noted that Booster 18 would likely be a complete loss due to its anomaly.
Booster 18 had rolled out only a day earlier and was one of the first vehicles in the Starship V3 program. The V3 series incorporates structural reinforcements and reliability upgrades intended to prepare Starship for rapid-reuse testing and eventual tower-catch operations. Elon Musk has been optimistic about Starship V3, previously noting on X that the spacecraft might be able to complete initial missions to Mars.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Elon Musk
SpaceX Starship Version 3 booster crumples in early testing
Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
SpaceX’s new Starship first-stage booster, Booster 18, suffered major damage early Friday during its first round of testing in Starbase, Texas, just one day after rolling out of the factory.
Based on videos of the incident, the lower section of the rocket booster appeared to crumple during a pressurization test. Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
Booster test failure
SpaceX began structural and propellant-system verification tests on Booster 18 Thursday night at the Massey’s Test Site, only a few miles from Starbase’s production facilities, as noted in an Ars Technica report. At 4:04 a.m. CT on Friday, a livestream from LabPadre Space captured the booster’s lower half experiencing a sudden destructive event around its liquid oxygen tank section. Post-incident images, shared on X by @StarshipGazer, showed notable deformation in the booster’s lower structure.
Neither SpaceX nor Elon Musk had commented as of Friday morning, but the vehicle’s condition suggests it is likely a complete loss. This is quite unfortunate, as Booster 18 is already part of the Starship V3 program, which includes design fixes and upgrades intended to improve reliability. While SpaceX maintains a rather rapid Starship production line in Starbase, Booster 18 was generally expected to validate the improvements implemented in the V3 program.
Tight deadlines
SpaceX needs Starship boosters and upper stages to begin demonstrating rapid reuse, tower catches, and early operational Starlink missions over the next two years. More critically, NASA’s Artemis program depends on an on-orbit refueling test in the second half of 2026, a requirement for the vehicle’s expected crewed lunar landing around 2028.
While SpaceX is known for diagnosing failures quickly and returning to testing at unmatched speed, losing the newest-generation booster at the very start of its campaign highlights the immense challenge involved in scaling Starship into a reliable, high-cadence launch system. SpaceX, however, is known for getting things done quickly, so it would not be a surprise if the company manages to figure out what happened to Booster 18 in the near future.
SpaceX issues statement on Starship V3 Booster 18 anomaly
Tesla analyst maintains $500 PT, says FSD drives better than humans now
