Tesla has announced that it is starting the rollout of Track Mode, a feature of the Model 3 Performance that allows the car to perform better on a racecourse, today. In light of the feature’s release, Tesla has published a blog post outlining the science behind Track Mode, as well as the feature’s specifics.
While Tesla’s other performance-oriented upgrades like Ludicrous Mode for the Model S and X help a vehicle with straight-line acceleration, Track Mode helps the company’s electric cars handle corners better. Tesla’s blog post notes that Track Mode was designed specifically to be used on closed autocross circuits and racetracks. The company also pointed out that its goal behind the development of Track Mode was simple — they wanted to use the power of the vehicle’s electric motor and instant torque to “make cornering on the track feel just as natural as forward acceleration.”
Track Mode enables vehicles to precisely control whether torque goes to the front or the rear wheels. This allows the Model 3 Performance to instantly increase or decrease the car’s rotation in a corner. With such a system in place, racing enthusiasts would find that highly technical driving sessions on a closed circuit would be a lot easier.
Track Mode starts rolling out today
— Tesla (@Tesla) November 8, 2018
Unlike the usual Sport Modes of legacy carmakers, which usually involve the disabling of stability control, the Model 3 Performance’s Track Mode adds features to the vehicle. Tesla accomplished this by replacing the electric car’s stability control system with its own Vehicle Dynamics Controller — a software specifically developed for the company’s electric vehicles that acts as both a stability control system and a performance enhancement on the track. Tesla also provided a summary of the features that are employed by Track Mode when it is activated.
Motor Torque for Rotation
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Our Vehicle Dynamics Controller continually monitors the state of the vehicle and all of the inputs from the driver to determine the driver’s intention and affect the rotation of the car in a matter of milliseconds. Track Mode relies heavily on the front and rear motors to control the car’s rotation, and we have the ability to command a 100% torque bias. When cornering, if rotation is insufficient to the driver’s request, the system controls a rear biased torque. Conversely, when rotation is excessive, we command a front biased torque.
Increased Regenerative Braking
Heavy regenerative braking may not be comfortable for day-to-day driving, but on a track, it has several key advantages. It gives the driver more authority with a single pedal, improves the endurance of the braking system, and sends more energy back into the battery, maximizing the battery’s ability to deliver large amounts of power. It also gives the Vehicle Dynamics Controller more authority to create or arrest rotation with the motors when your foot is lifted off of the accelerator pedal.
Track Focused Powertrain Cooling
The high output power required for track driving generates a lot of heat, so endurance on the track requires more aggressive cooling of the powertrain. We proactively drop the temperatures of the battery and the drive units in preparation for the track and continue to cool them down in between drive sessions. We can also allow operation of the powertrain beyond typical thermal limits and increase our refrigerant system capacity by overclocking the AC compressor into higher speed ranges.
Enhanced Cornering Power
We typically think of using brakes to slow down a car, but you can actually use them to make the car faster out of a corner. All Model 3s are equipped with open differentials, which send an equal amount of torque from the motors to both the left and right wheels. When cornering, the wheels on the inside of the corner have less load on them, which means they can provide less tractive force than the outside wheels. To prevent excess slip on this inside tire, we have to limit the torque for both wheels, leaving power on the table. In Track Mode, we simultaneously apply brake and motor torque to produce a net increase in tractive force while cornering. This is similar to how a limited slip differential works, except when using the brakes, the differential can be optimized for various driving conditions.
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What is particularly exciting about the release of Track Mode is the fact that it is just the first version of the system. On its blog post, Tesla noted that Track Mode is set to improve further in the future through over-the-air updates.
When Elon Musk announced the Model 3 Performance on Twitter, he noted that the vehicle would be around 15% faster than a BMW M3 on the track. Considering the pedigree of the German-made performance sedan as well as the tendency of Tesla’s previous vehicles to throttle their performance on a track, Musk’s claims were met with a notable degree of skepticism from both avid car enthusiasts and critics alike. That said, initial reviews of the feature were notably positive.
Tesla conquered the drag strip with Ludicrous Mode. It remains to be seen if the company can do the same on the closed circuit with Track Mode. Considering the deliberate design of the feature, though, there is a pretty good chance that the Model 3 Performance would soon be just as formidable on the track as the Model S P100D is on the drag strip.
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
