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Tesla Model 3 with ‘Track Mode’ squares off against Jaguar I-PACE and MotorTrend’s top rated sports sedan
While the Model S and the Model X are monsters on the drag strip, the premium electric cars have developed a reputation for being ineffective during extended track driving. Tesla aims to shatter this perception with the Model 3 Performance, as the vehicle is designed to be the first of the company’s electric cars that is competitive on the racecourse. Tesla is even preparing a specific and aptly-named mode for the vehicle to achieve this goal — “Track Mode.”
The Tesla Model 3 Performance has been getting universally positive reviews from numerous publications, from the Wall Street Journal to Car & Driver. Reviewers have praised the vehicle for its handling and quickness, as well as its sheer fun factor when driven hard. Auto publication Road & Track even sampled the Model 3 Performance’s upcoming “Track Mode” feature, which allows the vehicle to perform impressive high-speed maneuvers on a racecourse.
Tesla’s Track Mode for the Model 3 Performance was recently put to the test by auto publication MotorTrend, which held comparative tests pitting the electric sedan against the Alfa Romeo Giulia Quadrifoglio, as well as another all-electric car, the Jaguar I-PACE EV400. The tests, which involved track testing all three vehicles by veteran race driver Randy Franklin Pobst, allowed the publication to analyze how the Model 3 Performance stacks up against a fellow track-capable EV and the best fossil fuel-powered sports sedan available today.
Needless to say, the results of the tests were very compelling.
It was easy to determine that among the three, the Jaguar I-PACE EV400 was at a disadvantage, particularly due to its 4,946-pound mass and its substantial ride height. The I-PACE’s electric motors, which produce a combined 394 horsepower, are also 22% less than the Giulia Quadrifoglio. These disadvantages were evident when the veteran driver took the electric crossover around the “Streets” of Willow Springs International Raceway in CA, as the I-PACE took 1:27.00 to complete a lap.
The difference between the track capabilities of the Model 3 Performance and the Alfa Romeo Giulia Quadrifoglio was far more difficult to call. With Track Mode enabled, the Model 3 Performance set a new record for production electric cars on the racecourse, completing the run at 1:23.90. That’s 0.07 seconds faster than one of Ford’s best track vehicles, the Mustang GT Performance Pack 2. That said, Pobst, who was driving the Model 3 Performance, noted that the vehicle was easy to understeer, and that “there’s something weird happening when I lift off the brake.” The sensation that the race driver was referring to was the Model 3 Performance’s regenerative braking, which is emphasized even more when Track Mode is enabled.
True to its reputation as the best sports sedan in the market today, the Alfa Romeo Giulia Quadrifoglio completed the lap in 1:22.78, 1.12 seconds faster than the Model 3 Performance. Pobst noted that the turbocharged V6-powered vehicle “does exactly what you expect. No surprises. Always predictable.” After two sets of hard laps, though, half of the Alfa Romeo’s Pirelli P Zero Corsa AR Asimmetrico front tires were all but gone. The Model 3 Performance’s Michelin Pilot Sport 4S tires, on the other hand, were at worst scuffed. A Tesla engineer remarked to the publication that the Model 3 Performance could match the Giulia Quadrifoglio’s time if they were willing to compromise the vehicle’s tires as well.
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Ultimately, MotorTrend‘s track tests show that the Model 3 Performance, at its current state, is still not quite enough to topple the auto market’s best sports sedan. That said, Track Mode, despite being a work in progress, is a very strong baseline. The publication noted that for now, it would be wise to look at Tesla’s Track Mode for the Model 3 Performance as Version 1.0 of the feature. Once Version 2.0 is ready, then vehicles such as the Alfa Romeo Giulia Quadrifoglio would also be wise to fear Tesla’s first track-capable vehicle.
Even without Track Mode, the Tesla Model 3 Performance is already starting to win over veteran auto enthusiasts, including longtime enthusiasts of legacy carmakers like BMW. Moshen Chan, an indie app developer who has been a BMW fan for ~20 years, noted that Tesla’s electric car “absolutely outperforms anything BMW has to offer today.”
The Model 3 Performance’s Track Mode is one of the electric sedan’s most compelling features. Describing the feature in an interview with YouTube tech host Marques Brownlee, Musk likened Track Mode as an “Expert User Mode” for drivers.
“Track Mode will open up a lot of settings. You can adjust settings, and it’s kinda like an ‘Expert User Mode.’ You can sort of adjust traction control, adjust battery temperature. You can basically configure a bunch of things, and it will tell you, like ‘Hey, you know if you do this, it’s a bit risky. You’re gonna wear out your brakes sooner; you might blow a circuit.’ But like, it’ll be clear — like, you know, this is the risk you’re taking. It’s kinda like if you have a graphics card in a computer. You can go in there and change the settings, and you can overclock things,” Musk said.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
