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Tesla’s primary weapon in the EV price war is its commanding lead in profits

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Tesla was battered and bruised last year by a series of headwinds, from Giga Shanghai’s shutdowns to CEO Elon Musk’s TSLA stock sales to fund his Twitter acquisition. It was then no surprise that the EV maker started 2023 on a much different stance. Just a few days and weeks into the year, Tesla started a price war. 

Tesla’s aggressive price cuts to its lineup of vehicles are not just a warning shot in the electric vehicle sector. It is also a power play of sorts, as it shows that the company has what it takes to significantly reduce the prices of its vehicles and possibly still be profitable. It’s a move that other automakers may follow at their own risk. 

Reuters analysis estimated that Tesla earned $15,653 in gross profit per vehicle during Q3 2022. That amount is over twice as much as Volkswagen and five times as much as Ford. This is a notable development for Tesla, considering that the company was once one of the auto industry’s biggest money losers. 

Tesla’s transformation into an automaker with a commanding lead over rivals in terms of profit per vehicle is quite incredible. It involved a lot of difficult choices, such as using technologies like Giga Presses to create mega casts that would then reduce production costs. Tesla is not done either, as the company is still busy with other projects, such as its in-house battery production ramp. 

Bill Russo of Automobility, an industry consultancy in Shanghai, noted that Tesla’s aggressive price cuts could give a notable blow to the company’s rivals, some of whom are operating on thin margins. “Tesla has taken the nuclear option to bully the weaker, thin-margin players off the table. Big pie, fewer slices, more to eat for those that remain,” Russo noted. 

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In China, such a scenario seems to be playing out. Following Tesla’s aggressive price cuts, Chinese EV maker Xpeng also decided to cut its vehicles’ prices. However, Reuters data estimates that Xpeng is already at a net loss of $11,735 per vehicle, which would make its price-cut strategy a risky move. The same is true for Vietnamese EV startup VinFast, which is trying to enter the US market. In recent comments, the company stated that it would be using price promotions to fight back against Tesla. 

Perhaps the company best positioned to stand against Tesla’s price war would be BYD, which is already beating the American EV maker’s volumes in China. BYD has so far not initiated price cuts of its own, but its $5,456 per vehicle gross margins do provide the automaker more headroom to compete in Tesla’s price war. 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Starship lunar update shows SpaceX will not give up the Moon without a fight

SpaceX stated that the revised concept aims to “result in a faster return to the moon while simultaneously improving crew safety.”

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Credit: SpaceX

SpaceX is reassessing its Starship mission plan for NASA’s Artemis 3 program, exploring what it calls a “simplified” architecture that could accelerate the first crewed lunar landing of the 21st century. 

The private space company stated that the revised concept aims to “result in a faster return to the moon while simultaneously improving crew safety,” following NASA’s decision to reopen the lunar mission contract to new competition.

SpaceX outlines HLS progress

In a blog post titled To the Moon and Beyond, SpaceX detailed recent Starship milestones and reaffirmed its role as a “core enabler” of NASA’s lunar ambitions. As per SpaceX, its efforts are not just aimed at returning to the Moon. It is aimed at establishing a permanent, sustainable presence on the lunar surface. 

“Since the contract was awarded, we have been consistently responsive to NASA as requirements for Artemis III have changed and have shared ideas on how to simplify the mission to align with national priorities. In response to the latest calls, we’ve shared and are formally assessing a simplified mission architecture and concept of operations that we believe will result in a faster return to the Moon while simultaneously improving crew safety,” SpaceX wrote in its post.

The post described Starship’s vast potential for lunar operations, noting that a single vehicle provides over 600 cubic meters of pressurized habitable volume, roughly two-thirds that of pressurized volume of the entire International Space Station, and is “complete with a cabin that can be scaled for large numbers of explorers and dual airlocks for surface exploration.” 

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SpaceX also mentioned its fixed-price NASA contract, which ensures taxpayer protection while incentivizing milestone-based progress. As part of its preparations for a Moon mission, SpaceX plans to conduct a key in-space refueling demonstration in 2026, as noted in a Space.com report. Regerdless, SpaceX is still continuing the parallel development of its “core” Starship for Mars and deep-space exploration.

SpaceX’s update followed NASA concerns

NASA Acting Administrator Sean Duffy recently voiced frustration over Starship’s pace, noting on CNBC that SpaceX “pushed their timelines out” while the U.S. remains in a race against rivals. In a comment, Duffy stated that NASA will not wait for one company as it pushes forward with its Artemis program.

“I love SpaceX. It’s an amazing company. The problem is, they’re behind. They’ve pushed their timelines out, and we’re in a race against China. The president and I want to get to the Moon in this president’s term, so I’m going to open up the contracts. I’m going to let other space companies compete with SpaceX, like Blue Origin,” Duffy said.

Elon Musk publicly criticized Duffy over his remarks, but SpaceX’s latest update has shifted the focus back to technical progress and mission readiness. While SpaceX did not elaborate on the details of its simplified architecture, Musk hinted that Starship could eventually accomplish “the whole moon mission” on its own. “Starship will build Moonbase Alpha,” Musk wrote in a recent post on X. 

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Neuralink Head of Surgery teases exciting Tesla Optimus update

If successful, the test could result in Neuralink patients accomplishing impressive feats using Optimus.

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Credit: Tesla

Neuralink’s Head of Surgery has teased what could very well be the an incredibly ambitious and insane collaboration with Tesla Optimus, Elon Musk’s humanoid robot that is expected to start initial trial production sometime next year. 

If successful, the test could result in Neuralink patients accomplishing impressive feats using Optimus.

Neuralink’s current trials

Neuralink recently shared a video of Alex, the second human recipient of its Telepathy device. Alex is part of Neuralink’s PRIME study, and he was selected to be the first patient to control a robotic arm using only his mind. As could be seen in the video, Alex is now capable of operating household appliances using a robotic arm that he controls with his mind. 

In response to the video, which was posted by Neuralink co-founder and President DJ Seo, the startup’s Head of Surgery Mechanical Engineering, Danish Hussain, joked that the company is really just helping out people. This was despite critics arguing that Neuralink is some giant evil corporation. “We’re literally just out here helping the homies eat pretzels lol,” the Head of Surgery ME wrote. 

Next steps with Optimus

The Neuralink Head of Surgery ME’s comments caught quite a bit of attention on X, with some, such as Elon Musk, highlighting that Neuralink is actually a pretty small company. Other commenters also asked whether Neuralink would eventually train its patients with Tesla Optimus V2, a humanoid robot. Hussain shared an exciting response: “We’re starting simple, but this will happen very soon!” he wrote in a post on X.

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Having the capability to control an Optimus robot using only the mind would most definitely be a life-changing ability for Neuralink’s patients. Of course, Tesla might wait until Optimus V3 gets rolled out before such a trial might happen, as that is the variant of the humanoid robot that seems to be heading for mass production. Either way, it seems like an age where Optimus robots can be controlled by thoughts using a Neuralink implant may be coming sooner than expected.

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Tesla Supercharger Network is so reliable, it’s pushing Model Y sales

Tesla’s Supercharger network is proving to be a key factor in the company’s dominance in several key markets.

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Credit: Tesla

Tesla’s Supercharger network is proving to be a key factor in the company’s dominance in several key markets. These include Norway, which has become a place of strength for the new Model Y. 

This was hinted at by Tesla’s Director of Charging, Max de Zegher, on social media platform X.

Supercharger network sets the industry standard

As noted by the Tesla executive, the Model Y accounted for 29% of all vehicle sales in Norway in September. Part of the vehicle’s success was likely due to the reliability of the Supercharger Network, which is class leading even in Norway, where 98% of new cars sold are electric.

De Zegher emphasized on X that Tesla Superchargers are still in a class of their own. An EPSI survey of nearly 1,500 Norwegian EV drivers supported his claim, as Tesla Superchargers retained first place in customer satisfaction for the fifth consecutive year. 

The EPSI Survey‘s results

Respondents to the EPSI survey praised the Supercharger network’s strong uptime, abundant capacity, and user-friendly digital solutions, placing it ahead of other operators such as Uno-X. Survey researchers highlighted that Tesla has set the standard when it comes to simplicity in the charging process.

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Drivers also cited competitive pricing and seamless plug-and-charge functionality as major reasons they prefer Tesla’s network, especially in Norway’s extreme winter conditions where reliability is critical.

“Tesla has set the standard for simplicity in the charging process. Combined with competitive prices, this means that many electric car drivers say they are likely to choose Tesla again the next time they need to charge,” EPSI noted in a post.

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