Investor's Corner
Tesla’s Model 3 safety claims and the NHTSA’s scrutiny: A look at an old (revived) story
Multiple reports have recently emerged about the US National Highway Traffic Administration scrutinizing Tesla and the company’s claims that the Model 3 has the lowest probability of injury among vehicles tested by the agency. It should be noted that the NHTSA’s scrutiny, which involved a cease-and-desist letter to Tesla and a prompt response from the automaker, transpired last October, following the agency’s release of the Model 3’s 5-Star Safety Rating.
The NHTSA’s reaction to Tesla recently came to fore due to documents shared by staunch TSLA critic and transparency group Plainsite, which was able to access both the NHTSA’s cease-and-desist letter to Tesla as well as the electric car maker’s response to the agency thanks to a Freedom of Information Act request. What’s quite peculiar about the new string of reports, including those from Bloomberg and Reuters, is that they highlight the NHTSA’s allegations about the company’s alleged misleading claims about the Model 3, but not Tesla’s response arguing that it used the agency’s own data to arrive at its conclusions.
To get an accurate picture of this story, one must look at the full cease-and-desist letter sent by the NHTSA to Tesla, as well as the entire contents of the electric car maker’s response. A copy of each letter will be embedded in this article, to provide a full account of the two parties’ correspondence.
Following Tesla’s release of its blog post stating that the Model 3 has the lowest probability of injury among the vehicles tested by the NHTSA, the agency sent the Silicon Valley-based company a cease-and-desist letter. Addressed to Elon Musk, the letter claimed that Tesla had “issued a number of misleading statements regarding the recent Government 5-Star Ratings of the Tesla Model 3.” NHTSA Chief Counsel Jonathan Morrison, who sent the letter, further argued that statements such as “lowest probability of injury in all cars” are inaccurate and not in the best interests of consumers.
The NHSTA’s cease-and-desist letter to Tesla could be accessed below.
Tesla Model 3 Safety Claims… by Simon Alvarez on Scribd
Tesla disagreed with the NHTSA’s allegations in its response to the cease-and-desist letter. The electric car maker argued that its statements about the Model 3’s safety were neither untrue nor misleading, especially since the company used the NHTSA’s own data (which could be accessed here) when it stated that the electric sedan, as well as its largest siblings, the Model S and Model X, have the lowest probability of injury among vehicles tested by the agency. Tesla also noted that the Model 3’s achievement is “exactly what NHTSA intended with the NCAP — to encourage manufacturers to continuously immprove safety.” With this in mind, Tesla noted that there was no reason to discontinue its blog post highlighting the Model 3’s safety.
Tesla’s full response to the NHTSA could be read below.
Tesla Model 3 Safety Claims… by Simon Alvarez on Scribd
It should be noted that the NHTSA has not doubled down on its allgetations against Tesla’s statements about the Model 3. The electric car maker’s blog post explaining the Model 3’s stellar safety scores is still active today. Contrary to Plainsite’s statements that Tesla was “referred to the FTC for repeatedly lying about the safety of their vehicles,” it appears that the NHTSA opted to back down from its allegations once the electric car maker explained the rationale behind its statements about the Model 3.
The Model 3 has since gained perfect 5-Star Safety Ratings from the Euro-NCAP and the ANCAP, with both safety agencies lauding the vehicle for being one of the safest cars on the road. Following the vehicle’s crash tests, Matthew Avery, head of research at Thatcham Research, which conducts the crash tests with the Euro NCAP, noted that “Tesla has done a great job of playing the structural benefits of an electric vehicle to its advantage. The Tesla Model 3 achieved one of the highest Safety Assist scores we have seen to date.” These sentiments were echoed by ANCAP Chief Executive Officer James Goodwin, who noted that it was “great to see electric vehicles continuing to prioritize safety. It is encouraging to see Tesla give equal attention to the active safety systems and technologies on board as well as the safety fundamentals through the structure and restraints.”
H/T to Vladimir Grinshpun.
Tesla (NASDAQ: TSLA) will report its earnings for the second quarter of 2026 this evening after market close, and investors and analysts are waiting anxiously to see what the company will report for the second three-month span of the year.
Analysts have already put out their expectations from a financial standpoint for the company’s second quarter, but what’s unknown is what Tesla plans to discuss during the call.
Financial Expectations
Wall Street consensus expectations put Tesla’s Earnings Per Share (EPS) at $0.53, while revenues are expected to come in around $26.4 billion.
This would compare to an EPS of $0.39 and $22.19 billion compared to Tesla’s Q2 2025. Last quarter, EPS came in at $0.41 on $22.387 billion of revenue. Additionally in Q1, Tesla beat analyst expectations, but shares dropped over 3 percent the following trading day.
What We Expect
In terms of discussions, Tesla earnings are pretty sporadic and depend on a handful of things, including current events, investor questions, and more.
Tesla uses a platform called Say to field questions from investors and analysts. These questions are what will be used during the call. Here are the top 5 from the Retail side and top 3 from the Institutional side:
Retail:
“Tesla has missed short-term guidance on robotaxi 3 earnings reports in a row, from 50% coverage of USA by end of 2025 to most recently 7 new cities in 1H26. What is keeping Tesla back from accomplishing these short term goals that they’ve set for themselves?”
“What are the main constraints to expanding robotaxi operations faster, and how do you see that lining up with Cybercab production?”
“What’s the current status of Optimus Gen 3 production ramp, initial deployment in factories, and external sales timeline/volume for 2027? What tasks can we expect the Optimus to perform by end of 2027?”
“To reward long-term Tesla retail shareholders for their loyalty, can you commit to achieving at least half of the goals outlined in your 2025 compensation plan before considering any offers to acquire or merge Tesla?”
“Why has growth of robotaxi vehicles stalled? When will we see cybercab start customer rides?”
Institutional
“Previously, you’ve said Tesla would lead the R&D while SpaceX would lead production for Terafab. Can you provide an update on how that division of responsibilities is evolving, and any additional clarity on the expected capital contributions from Tesla and SpaceX?”
“For autonomous driving, Tesla’s fleet created a huge data advantage by collecting billions of real-world miles. That advantage doesn’t yet exist for Optimus. How should we think about data availability and its impact on Optimus development?”
“Why is it necessary to limit robotaxi operations within specific zones within cities to start? Will every city have to be rolled out this way?”
Tesla will report earnings for Q2 this evening with the Shareholder Deck at 4 p.m. ET, with the call starting around 5:30 p.m. ET.
Elon Musk
Elon Musk handed Grok something no other AI company can get their hands on
Elon Musk says SpaceX will feed engineering data into Grok’s next model, avoiding restricted material.
Elon Musk said Tuesday that SpaceX will feed its internal engineering data into the next major training run for Grok, the AI model now folded into SpaceX following February’s merger. In a post on X, Musk wrote that SpaceX’s “massive corpus of world-class engineering data,” excluding anything restricted under U.S. arms export law, will be added during supplemental training of what he called the “2T run,” a reference to a roughly two trillion parameter model that would nearly double the parameters behind the latest Grok 4.5 that’s rolling out.
SpaceX’s massive corpus of world-class engineering data (excluding material blocked by ITAR) will be added during supplemental training of the 2T run.
This will dramatically improve Grok’s engineering capabilities. https://t.co/BbQEViFByn
— Elon Musk (@elonmusk) July 21, 2026
The excluded material that Musk is referring to would fall under the International Traffic in Arms Regulations (ITAR), which restricts export of technical data tied to defense and space hardware. That likely rules out propulsion specifics for Merlin and Raptor engines along with guidance and control details for SpaceX’s launch vehicles, but leaves manufacturing knowledge, materials science, and Starlink hardware design on the table.
The announcement extends a pattern that has been building since SpaceX’s Nasdaq debut in June, when the company went public with Grok and xAI’s Colossus supercomputer folded into the pitch to investors.
Days after that listing, SpaceX closed its $60 billion all stock acquisition of coding startup Cursor, giving xAI both enterprise software distribution and a stream of real world developer data to train on. Grok 4.5 launched July 8 running partly on that Cursor training data, with Musk describing it as roughly comparable to Anthropic’s Opus 4.7 but faster and cheaper to run.
Feeding SpaceX’s own engineering data into the next AI model follows the same logic Musk has applied across xAI’s sister companies. Tesla supplies real world driving data and manufacturing expertise, X supplies conversational data, and now SpaceX supplies aerospace engineering data built up since 2002.
Musk did not give a release date for the upcoming AI model, referred to elsewhere as Grok 4.6. He has said the two trillion parameter run is in its final training phase and expected to wrap this week.
In a pointed message on X, Elon Musk warned that firms maintaining significant short positions in SpaceX over time face “very low” survival probability.
The statement comes amid post-IPO volatility for the rocket company, now trading under the ticker $SPCX.
The survival probability of firms who maintain a significant short position in SpaceX over time is very low
— Elon Musk (@elonmusk) July 17, 2026
Five weeks after what was described as the largest IPO in history, the stock had fallen roughly 30% from its peak above $2.6 trillion, briefly surpassing Microsoft and Amazon in market value. Short sellers celebrated gains of about $8.7 billion, but Musk’s reply underscores his long-term conviction.
The warning directly echoes a detailed bullish analysis arguing that Starship’s cost reductions could unlock a multi-trillion-dollar space economy. Projects ranging from solar power beamed from orbit and asteroid mining to orbital data centers and Mars terraforming were projected to create over $100 trillion in new market capitalization.
In this vision, SpaceX acts as the essential infrastructure provider, akin to AWS for cloud computing, capturing monopoly-like revenues from launches, crew transport, and data traffic across a rapidly expanding frontier.
This is far from the first time Musk has targeted short sellers. With Tesla, he has repeatedly framed persistent bears as destined for major losses. In July 2024, Musk declared that once Tesla achieves full autonomy and volume production of Optimus robots, “anyone still holding a short position will be obliterated. Even Gates,” referencing Microsoft co-founder Bill Gates’ reported short bets.
Elon Musk reveals what Tesla stock surge could do to Bill Gates
Earlier, in 2018, he taunted shorts that they had “about three weeks before their short position explodes,” a remark followed by sharp stock gains. Musk has also called short selling “value destroying” and once suggested it “should be illegal,” viewing it as betting against innovation and progress.
Critics often dismiss Musk’s optimism as hype, especially when near-term metrics like quarterly deliveries or stock fluctuations disappoint.
Yet his pattern remains consistent: framing short positions against his companies as fundamentally misjudging exponential technological leaps. For SpaceX shorts, the message is clear: betting against multi-planetary ambitions and the infrastructure monopoly they enable carries existential risk for the firms involved.
As Musk and supporters see it, the space economy’s upside dwarfs Earth-bound valuation models, making today’s dips temporary in a decades-long ascent.
Tesla is about to make parking in busy lots less stressful than ever
Tesla starts preparing for Optimus in its smartphone app
