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Tesla price reductions are causing disruptions in the US auto industry: report
American electric vehicle maker Tesla has lowered prices on its entire Model S3XY lineup in the United States, with some vehicle variants receiving as much as 20% off their previous price. The strategy has had a ripple effect across the automobile industry, and it has put pressure on competitors in the EV sector.
Tesla’s price reductions have received mixed reactions among investors and Wall Street analysts, with some arguing that the move was a response to declining demand. Others, on the other hand, have noted that Tesla’s lower prices are a strategy that could put pressure on competitors, especially since popular variants of vehicles like the Model 3 and Model Y are now eligible for a $7,500 federal tax credit.
Analysts have noted that it is clear Tesla’s price cuts have resulted in the EV maker undercutting its competition in the other electric vehicle sector. The lower vehicle prices have had a negative impact on the value of used Teslas as well, with some dealers stating that the Teslas in their inventory experienced a decline of several thousand dollars overnight, as noted in a report from The Wall Street Journal.
Bank of America analyst John Murphy noted that traditional car manufacturers, particularly those without Tesla’s scale in electric cars, are currently facing challenges in terms of profit margins or are losing money on their respective plug-in offerings. With this in mind, Tesla’s recent price cuts might lead to further cost reduction efforts from rival car companies — or even potentially trigger a price war in the EV segment.
“These price cuts are likely to make business even more difficult, just as they are attempting to ramp production of EV offerings,” Murphy noted.
A number of veteran automakers have responded somewhat to Tesla’s price cuts. A spokesman for General Motors has noted that the veteran automaker is keeping an eye on Tesla’s strategy, but the lower prices of the S3XY lineup has not had any significant impact on GM. “It does underscore the value of having a broad EV portfolio at multiple price points, which is exactly what we’re developing,” the GM spokesperson noted.
A spokesperson for Ford, on the other hand, noted that the veteran automaker reported record sales for its Mustang Mach-E all-electric crossover last year. The spokesperson also noted that the demand for its EV lineup, which includes the F-150 Lightning, has been high, and thus, Ford is keeping a close eye on the electric car market to maintain its competitive edge.
Data from research firm Motor Intelligence shows that Tesla accounted for about 65% of the total electric vehicle sales in the United States in 2022. That’s far ahead of Ford’s 7.6% and General Motors’ 3.5%. Despite this, both the GM CEO Mary Barra and Ford CEO Jim Farley have set the goal of eventually surpassing Tesla as the top-selling EV in the country at some point in the future.
Tesla’s price cuts, if any, appear to have caused a rise in interest in the company’s electric cars. As per Edmunds, the number of people researching Tesla vehicles increased significantly after the price cuts were announced. Edmunds noted that the Model Y was the second most researched vehicle on their website for the week ending January 15, a vast improvement from its place as the 70th most researched car the week before. Tenet, a firm that specializes in providing financing services to EV buyers, also observed that applications for Tesla vehicle financing tripled soon after the S3XY lineup’s price cuts in the United States were rolled out.
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News
Tesla is releasing a modified version of FSD v14 for Hardware 3 owners: here’s when
Tesla is releasing a modified version of the Full Self-Driving (Supervised) version 14 suite for Hardware 3 owners, the company announced during the Q3 Earnings Call earlier this week.
Perhaps one of the most pertinent issues for Tesla owners right now is that those owners who have purchased vehicles before 2024 have been stuck with an older version of the company’s self-driving chip, known as Hardware 3 or AI3.
Owners with Hardware 3 vehicles have been stuck in a strange limbo for some time, wondering whether they should wait for the company’s official plans to upgrade them to the newer AI4 or even the to-be-released AI5 chip, or if they should purchase a new vehicle altogether. The upgrade would give them access to the latest Full Self-Driving suite releases, but it would likely cost a good bit of money.
For a while, these owners have been waiting for Tesla to give some sort of update on its plans, as the company has, in a way, danced around the issue by stating it would “take care” of those owners. The problem is, the definition of “take care” is subjective, and nobody knows if that means an upgrade or a free Tesla t-shirt.
Nevertheless, many owners finally got a tad bit more color earlier this week during the Earnings Call, when company executives finally outlined the beginning of a concrete plan to “take care” of HW3 vehicles.
Chief Financial Officer Vaibhav Taneja gave the first bit of the answer, as it is a personal issue to him. He also said that the vehicle he drives is a HW3 car, so it is impacted by the lack of upgrades.
He said:
“We have not completely given up on HW3. These customers are very important. They are early adopters. We will definitely take care of you guys.”
However, Tesla’s Head of AI, Ashok Elluswamy, gave some additional color, revealing that Tesla plans to launch v14 Lite for HW3 cars, and it will be released in Q2 of next year, tentatively:
“Once the v14 release series is fully done, we are planning on working on a v14 Lite version for hardware three. Probably expected in Q2 next year.”
This is somewhat of an answer, but some owners have already voiced discontent with this solution because HW3 will more than likely not be capable of what will be the “feature complete” version of FSD.
Elon Musk
Jim Cramer chimes in on Tesla CEO Elon Musk’s pay package
“Don’t be small-minded: Tesla is about robots, Full Self-Driving, the future. Give him his package.”
Investor and host of Mad Money on MSNBC , Jim Cramer, has chimed in on Tesla CEO Elon Musk’s pay package and whether it should be rewarded to the frontman or not.
Cramer has drawn a lot of attention regarding his sentiments on Tesla, as investors have routinely given him a pretty hard time over what he’s said about the company.
For the past few years, we have covered his comments on Tesla when he has something to say, mostly because his opinion on the stock seems to change pretty frequently; at a minimum, he has something different to say about it every few months.
However, Cramer knows Musk’s value to Tesla, and said on Thursday that he believes the CEO deserves his pay package:
“Don’t be small-minded: Tesla is about robots, Full Self-Driving, the future. Give him his package.”
Don’t be small-minded: tesla is about robots, full self driving, the future. Give him his package
— Jim Cramer (@jimcramer) October 23, 2025
Cramer’s comments come just one day after Tesla’s Q3 2025 Earnings Call, where Musk took several opportunities to call out the importance of the pay package and how it could impact the company’s future — with or without him.
Musk said at one point that he would not feel comfortable continuing to develop the company’s massive fleet of Optimus bots without having appropriate control of the company from a voting perspective.
He said he does not want so much power that if he “were to lose his mind,” he could not be removed. However, he does feel he needs to be protected from “activist shareholders,” or “corporate terrorists” like proxy groups Institutional Shareholder Services (ISS) and Glass Lewis:
“My fundamental concern with regard to how much voting control I have at Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future? …It’s just, if we build this robot army, do I have at least a strong influence over that robot army, not current control, but a strong influence? That’s what it comes down to in a nutshell. I don’t feel comfortable wielding that robot army if I don’t have at least a strong influence.”
At the end of the call, Musk said:
“Like I said, I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis, who have no freaking clue. I mean, those guys are corporate terrorists.”
Cramer is one of many who realize Musk’s importance to Tesla, and how the company would likely lack the guidance and prowess it does without his planning and drive. However, Tesla shareholders will have the ultimate say on November 6 when they vote on Musk’s compensation plan.
Elon Musk
Tesla is stumped on how to engineer this Optimus part, but they’re close
Tesla has been stumped on how to engineer one crucial part of the Optimus bot, but CEO Elon Musk says the company is “on the cusp” of achieving something great with the project.
During the Q3 2025 Earnings Call, Tesla CEO Elon Musk revealed the company is moving closer to a major breakthrough with the Optimus project, and said they are “on the cusp of something really tremendous.”
However, it seems there is one specific portion of the robot that has truly stumped engineers at the company: the hand, fingers, and forearm.
Musk went into great detail about how incredibly complex and amazing the human hand is, highlighting its dexterity and capability, as its ability to perform a wide variety of tasks is especially impressive:
“I don’t want to downplay the difficulty, but it’s an incredibly difficult thing, especially to create a hand that is as dexterous and capable as the human hand, which is incredible. The human hand is an incredible thing. The more you study the human hand, the more incredible you realize it is, and why you need four fingers and a thumb, why the fingers have certain degrees of freedom, why the various muscles are of different strengths, and fingers are of different lengths. It turns out that those are all there for a reason.”
It’s been pretty apparent that Tesla has made massive strides in the Optimus project, especially considering it has been able to walk down hills, learn things like Kung Fu, and even perform service tasks like serving food and drinks.
However, a recent look at a Gen 2.5 version of Optimus posted by Marc Benioff, the CEO of Salesforce, showed that Tesla was likely using mannequin hands until it developed something that was both useful and aesthetically pleasing:
Very likely that these are non-functional to not give away any major details about next-gen Optimus
The hands are amongst the most complex and important parts of the entire project https://t.co/YgoeNjamvI
— TESLARATI (@Teslarati) September 3, 2025
Musk continued on the call last night that the Tesla team was confronted with an “incredibly difficult” challenge from an engineering perspective, and the hands and actuators for that specific part were tough to figure out:
“Making the hand and forearm, because most of the actuators, just like the human hand, the muscles that control your hand are actually primarily in your forearm. The Optimus hand and forearm is an incredibly difficult engineering challenge. I’d say it’s more difficult than the rest of the robot from an electromechanical standpoint. The forearm and hand are more difficult than the entire rest of the robot. But really, in order to have a useful generalized robot, you do need an incredible hand.”
The CEO continued that developing a useful and effective robot was “crucial to the future of the company,” and that he works with Optimus’s design team each Friday night.
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