Investor's Corner
Tesla explores safer battery production with novel DCM recovery system patent
In what appears to be yet another step towards its goal of operating the safest car factory in the industry, Tesla has been granted a patent that could pave the way for a safer process in battery production. Published today, the electric car maker’s recent patent describes a system to treat and recycle Dichloromethane (DCM), which is among the materials used in the production of electric car batteries.
DCM is utilized in a variety of industrial processes, particularly in chemical plastic welding, wherein softened plastic pieces or surfaces are welded together. The material is also used to soften plastic sheets for stretching or shaping, and as a solvent to remove unwanted compounds. In Tesla’s case, DCM is among the materials used in the forming of a separator base film for an electric car’s battery system. While DCM is invaluable in manufacturing, though, the material carries some health risks.
Dichloromethane is the least toxic among the simple chlorohydrocarbons, but its high volatility makes it an inhalation hazard nonetheless. Prolonged skin contact with DCM could also result in the material dissolving some of the skin’s fatty tissues, causing irritation or chemical burns. With these risks in mind, the manufacturing industry employs ways to recover DCM. Tesla notes that current systems for DCM treatment and recovery are capital intensive, particularly since the process involves expensive components such as activated carbon beds, condensers, steam boilers and distribution systems, density separation vessels, and waste water treatment systems.
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- Tesla’s DCM treatment system. [Credit: US Patent Office]
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- A flow chart illustrating operation of an exhaust treatment system for treating a waste exhaust stream containing dichlorom ethane. [Credit: US Patent Office]
Tesla’s diagrams outlining its Dichloromethane recovery system. [Credit: US Patent Office]
Tesla describes conventional DCM treatment systems as follows:
“The DCM itself may then be removed through a heating and/or evaporation process with the exhaust collected. This exhaust containing DCM is then combined with the exhaust from other tools and systems used in the manufacturing process. The combined exhaust may then be fed to a recovery plant to recover DCM. In the recovery plant, the waste exhaust stream is typically treated with activated carbon. This scrubbing process requires high capital expenditure (many expensive components), high operating cost (extensive steam and cooling water consumption which accounts for >20% of total process cost), large footprint requirements, and large amounts of waste water that need to be processed. In order to address these cost and environmental-remediation issues, an improved process for the removal of DCM from exhaust streams is needed.”
Tesla’s take on DCM treatment and recovery utilizes a wet scrubber and a density separator vessel as key components of the system. The wet scrubber in Tesla’s patent has a scrubbing chamber, where water is utilized to scrub the waste exhaust stream containing the DCM. Tesla notes that the wet scrubber could adopt a variety of designs to remove DCM from the waste exhaust stream, including a venturi scrubber design, a condensation scrubber design, an impingement-plate scrubber design, or a packed bed tower design, among others.
Tesla’s use of a density separator vessel is described in the following section from the patent.
“The density separator vessel has an inlet to receive the liquid water and DCM mixture, an outlet to expel DCM, and an outlet to expel waste water. The DCM may be routed back to the industrial process for reuse and/or collected for later use. The waste water may be routed back to the wet scrubber, as shown along (the) waste water return loop. Waste water may also or alternately be routed to waste water treatment system for processing for subsequent treatment by (the) waste water treatment system.
“Typically, a large portion of the waste water is returned to the wet scrubber via (the) waste water return loop and a small portion of the waste water is treated by the waste water treatment system. Even though the waste water may contain small amounts of DCM, the waste water will still retain its ability to scrub the exhaust containing DCM. An advantage of the wet scrubber over the activated carbon beds is that all or most of the water used by the wet scrubber is the waste water from the density separator vessel, resulting in substantial savings of water and energy, and resultantly, substantial cost savings.”
Tesla states that compared to more traditional exhaust treatment systems, the DCM treatment and recovery model outlined in its patent effectively eliminates the use of steam and cooling, while also reducing the amount of throughput needed by a waste water system. With these efficiencies in mind, Tesla notes that it could reduce capital expenditures and operating costs “for the same amount of DCM processed processing.” The increased simplicity of the system and reduced airflow rates are expected to help the company get more savings in both capital expenditures and operating costs as well.
More than a way to optimize its operations, Tesla’s recent patent is also a notable way for the company to keep its battery production lines safer for its employees. Such a system would definitely be invaluable for the company, particularly as Tesla is now preparing the Model 3 for a global rollout. With the Model 3 ramp ever-expanding, and with high-volume vehicles like the Model Y and possibly the Tesla pickup truck in the pipeline, optimizations such as a better DCM treatment and recovery system are all but necessary.
Tesla’s recently published patent on its DCM treatment system could be accessed here.
Elon Musk
SpaceX’s Anthropic deal has a catch, and Elon Musk just addressed it
Elon Musk says SpaceX’s Anthropic compute deal cuts both ways after Chamath floats higher prices.
Elon Musk pushed back on Sunday against the idea that SpaceX’s compute contract with Anthropic is a one way bet, after venture capitalist Chamath Palihapitiya argued the company could use a termination clause to charge the AI lab far more.
“It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop. No crying in the casino for either party,” Musk wrote on X Sunday evening, replying to a clip of Palihapitiya’s comments shared by AI commentator Rohan Paul.
On the All-In podcast released Sunday, Palihapitiya said either side can walk away from the agreement on 90 days’ notice. If data center supply tightens, he argued, SpaceX could exercise that option and bring the contract back at two to three times the current price, and Anthropic would have little choice but to accept. He called it “the kingmaking move,” according to BigGo Finance.
The clause itself is not new. SpaceX disclosed in its IPO filings in May that Anthropic would pay $1.25 billion per month for dedicated capacity at its Colossus clusters through May 2029, nearly $45 billion in total, with both companies able to terminate on 90 days’ notice, as Teslarati reported at the time. SpaceX’s later compute deals with Google and Reflection AI carry similar exit terms.
What has changed is the political backdrop. Palihapitiya’s thesis rests on incoming Democratic governors pulling tax incentives for data centers and slowing new construction. In Texas, Gov.-elect Gina Hinojosa campaigned on a moratorium on new data center approvals, and Deutsche Bank analysts warned last week that SpaceX’s Texas compute capacity could face delays. SpaceX and Tesla shares both fell after the midterm results.
A slowdown would favor companies that already own capacity. SpaceX acquired xAI in February and has been renting data centers to outside AI labs before the space is needed for Grok. At the Baron Investment Conference on Friday, Musk said SpaceX was “getting 50 billion a year for 35 billion dollar investments” and that it can bring a data center online in eight or nine months, compared to two and a half years for competitors. He also said SpaceX is tracking toward an annualized revenue rate above $100 billion in December, with a “best guess” of $500 billion by December 2027.
Musk’s reply points to the other side of the clause. Anthropic has signed large compute agreements with Amazon, Google and Microsoft, and if that capacity comes online faster than new construction slows, the AI lab would have its own leverage to renegotiate or leave. Musk has called Anthropic “obviously currently the leader in AI,” and it remains one of SpaceX’s largest compute customers.
SpaceX shares rose more than 2 percent in overnight trading late Sunday after closing Friday at $134.27, according to Stocktwits.
Tesla and SpaceX shares fell on Wednesday after Democrats swept both chambers of Congress. The decline stood out as broader market securities recovered and turned positive, while both of Musk’s publicly traded companies lagged.
CEO Elon Musk already joked about the unsuccessful campaigning for the Republicans, but now the new party will make pretty drastic changes to how it handles Tesla and SpaceX, and those companies will adjust their outlook.
Let’s take a deeper look.
Tesla ($TSLA)
Tesla shares traded lower during the regular session after Democrats secured both the House and Senate. The stock was down 2.32 percent at around 1:45 p.m. on the East Coast, trading at around $389.30.
The pressure is tied to more than the raw scale of Musk’s political spending, estimated at $450–474 million this cycle with roughly $224 million directed at Texas. In that state, Tesla now faces a Democratic governor and a Democratic senator after Gina Hinojosa unseated Greg Abbott and James Talarico defeated Ken Paxton.
The Austin Gigafactory, Robotaxi pilot programs in multiple Texas cities, and any related AI compute expansion sit under a new state executive who campaigned against certain corporate subsidies and floated a moratorium on new data-center construction.
Federally, Democratic control of key committees opens the door to deeper examination of Tesla’s autonomous-driving safety record, federal energy-storage and manufacturing incentives, and the national-security implications of any combination with SpaceX.
Investors are also weighing whether the company’s historically close alignment with the prior Republican leadership will invite slower permitting, additional hearings, or tighter rules on Full Self-Driving deployment.
For Tesla, the political shift adds near-term friction around state permitting and federal regulatory approvals for autonomy and energy storage. A potential merger with SpaceX may face slower review even if it proceeds.
Core growth drivers such as vehicle deliveries, energy deployments, and robotaxi rollout remain intact, yet the stock now carries a higher political-risk premium that could weigh on valuation until the company demonstrates workable relationships with the new Texas leadership and congressional majorities.
SpaceX ($SPCX)
SpaceX shares also declined in live trading on November 4 following the Democratic midterm sweep. The stock traded at $134.97, down 4.49 percent. The drop occurred even as broader indexes stabilized, highlighting a company-specific reaction to the election outcome.
Musk’s large contributions, concentrated in Texas races that both companies lost, place SpaceX’s Starbase launch facility and headquarters under a new Democratic governor.
At the federal level, Democratic control of Congress enables greater scrutiny of NASA, the Department of Defense, and other contracts that support a meaningful share of revenue, along with reviews of Starlink national-security uses and any Tesla merger. Analysts have noted that empowered committees can hold hearings and request documents on these relationships.
For SpaceX, the results raise the risk of delayed contract awards, higher compliance costs, and tighter constraints on AI and satellite infrastructure expansion, particularly in Texas where a data-center moratorium has been discussed.
A merger with Tesla could encounter political friction that slows integration of launch, connectivity, and autonomy capabilities.
While Starlink growth and launch cadence continue as primary drivers, the company faces a more contested path for federal funding and state-level operations, requiring management to rebuild ties with the new congressional majorities and Texas leadership to limit the overhang.
Elon Musk
Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit
Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.
Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.
Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.
Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.
The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”
Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”
The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.
Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.
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