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Tesla Motors Service Centers Make a Pit Stop
Before I mention the pit crew like experience, I do want to mention that one of the most awesome parts of the Tesla service experience is the offer to valet your car at home.
Tesla Motor service center. (Source: Tesla Motors)
During the earnings conference call with Elon Musk and team in early August, Musk mentioned that Tesla Motors service centers are implementing a Formula One pit crew approach for Model S owners here in the U.S and in China.
In August, Musk said:
“So we actually bring the car and we kind of hit with a pit crew, like a Formula One pit crew. So instead of having one person per bay, the car gets slowly worked on over several days, it actually comes in and a team attacks it, and we’re constantly improving the tools and the metrics to say, how can we get the car perfect as fast as possible. We actually bring in people from Formula One to help with the training on this. And I think there’s a real opportunity to revolutionize the way service works.”
So how is Tesla Motors new Formula One approach working and what has the service center experience been, in general, for the young automaker?
Recently, I interviewed Model S 85 owner, David Zygmont, about his trips to Tesla Motors service centers over the last two years, the Model S service package and has he seen this Formula One approach in action. The slightly edited interview is below:
Grant Gerke: What actually made you decide to buy the service package, which includes 4 service visits in four years or 50,000 miles?
David Zygmont: So being an early adopter, being a really early product for a really young company, I think it was pretty realistic that there would be some need for service and I had hoped like, ‘Wouldn’t it be great if this all electric car would be really maintenance free, free of some real critical headaches.’ However, I should really expect some software glitches, right? I mean this car runs software for everything and I was expecting there to be quite a number of those initially.
So, I feel like there is still a bunch of inconsistencies regarding when to bring in the car. Some service centers report that you really only need to come every 12 months and some say you still need to do it every 12,500 miles. My service center in Highland Park, Ill., says it’s every 12,500 miles.
And, there’s no ambiguity in the contract as it ends at 50,000 miles or four years, whichever you reach soonest. So, I’m going to get maximum value because I’m almost at 20,000 to 25,000 miles a year, somewhere in that range. I need to do it every 12,500 to get maximum value of this, I’ve already been three times for a service checkup.
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Grant Gerke: What’s your service center experience been like, so far?
David Zygmont: I’ve had a pretty long relationship, a number of visits with Tesla service and for the most part, the people are really great. I really like working with people, especially the group that I worked with over the last nine to twelve months.
However, they don’t really share a lot in terms of documentation with these annual checkups. When you look at the paperwork, it says: We did an annual service and the parts used are batteries for the fobs and wipers for your windshield.
And I was like, “Okay, great.” That’s my $600?
Some of those visits have also included a number of other line items that I feel like some would happen whether I have the annual service or not because some of them were kind of classified as these service bulletins, which I think is very standard industry practice to say: hey, when your car is in, if we see this as a concern, because your VIN is labeled as… it may have this concern. So they look and if they see the concern, they fix it, and I’ve been very appreciative.
Other non-scheduled service center visits have included parts replaced and they’ve all been driven by some sort of failure and/or observation on my part that says this doesn’t feel right, and Tesla Motors has said either: We agree and made the repairs or they’ve said no to and I totally think that’s reasonable. An example would be Tesla considers it a wear issue, but some would also consider a design issue about why the wear is happening.
Also, I think the service center communication systems and behaviors that’s been implemented as a team have greatly evolved. Early on, I had services where I didn’t hear for three days and I’m like: what’s happened to my car?
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But now it’s just amazing service as I receive multiple text message updates per day when they have my car. All my recent service has been same-day stuff and they’ve done it really quickly, maybe that’s reflective of their Formula 1 approach.
David Zygmont’s Model S at Crater Lake last summer. (Source: David Zygmont)
Grant Gerke: Speaking of Formula One, what about this pit crew approach? Any signs of it in recent visits?
David Zygmont: Before I mention the pit crew like experience, I do want to mention that one of the most awesome parts of the Tesla service experience is the offer to valet your car at home. So, it entails the service center coming to your house and bringing a Model S loaner and leaving it with you. Then they bring it back all fixed, serviced and whatever that’s been done with it. No one else does that. So, I just want to quickly make mention of that.
But sometimes it actually works better in my day if I could just exchange with (a car) the service center on my way to work. Recently, I was waiting to pick up my car after some service and a car had just come off of a flatbed in front of the Highland Park shop. I watched as a pit crew went to work on that car immediately. It was four service guys–four technicians–and someone was in the driver seat with their laptop in front of them, plugged in on the side port of the Model S. Other team members had covers off, under the hood and they pulled some covers to access some different parts in the front area.
It was really clear that this was like all hands on deck, let’s triage this real fast. I thought that was pretty cool.
What about everyone else? What were some of your expectations for Tesla Motors service centers?
I want to thank Dave for his time and be sure to check out my podcast with Dave Zygmont’s road warrior adventures in his Model S 85 across the supercharger network, “Podcast | Dial-in a Model S Road Trip with These Tips.“
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Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
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None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
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.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
