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Tesla’s online-only sales model defended by used car dealer Carvana CEO

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Tesla’s decision to adopt an online-only model to sell its electric cars was recently defended by Carvana CEO Ernie Garcia, who went on CNBC’s Squawk Alley to discuss the electric car maker’s new sales strategy. Garcia noted that while Tesla will face challenges resulting from the shift in its sales model, the company’s return policy will likely be a difference maker for some buyers.

“I think every business has its challenges, but they’ve done a pretty good job overall. I wouldn’t be betting against them. I think when you buy a new car, questions are different, but the return policy is enormously powerful like it is on the used side. A customer knows they can return it,” the CEO said.

Garcia added that he does not see Tesla’s move to an internet-based sales strategy as a threat to his business, since Carvana only deals with used cars. The CEO even pointed out that Tesla’s shift can actually be good for Carvana. “Tesla has an incredible megaphone,” he said.

Garcia’s views on Tesla is coming from a well-established position, as Carvana currently stands as one of the United States’ premier online used car dealers. Carvana sells, finances, and buys back used cars through its website, and its growth has been so impressive that the company ranked as 5th in Forbes‘s list of America’s Most Promising Companies in 2015. The online used car dealer even went public in April 2017.

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Garcia’s views on Tesla is coming from a well-established position, as Carvana currently stands as one of the United States’ premier online used car dealers. Carvana sells, finances, and buys back used cars through its website. Its growth has been impressive over the years, with the company ranking as 5th in Forbes‘ list of America’s Most Promising Companies in 2015. The online used car dealer even went public in April 2017.

Tesla’s shift to an online-only sales model has proved to be a polarizing decision for the company. Tesla stock (NASDAQ:TSLA) has remained volatile since the change was announced last week, and some analysts from the Street have expressed their reservations about the new strategy. Among them was Barclays analyst Brian Johnson, who mocked Tesla by stating that the company’s adoption of an online-only model was its “un-iPhone” moment.

Other analysts were more optimistic. Toni Sacconaghi from Bernstein wrote in a research note that Tesla’s sales figures in 2018 seem to validate the company’s online-only sales strategy. “The move to direct sales is bold, though we are comforted that 70%+ of Tesla buyers in 2018 did *not* test drive prior to purchase,” Sacconaghi wrote.

Tesla’s online-only sales model is a way for the company to accelerate the rollout of the $35,000 Model 3, a vehicle that is considered as the company’s first true mass market car. Addressing the press during a call Thursday last week, Musk explained that the shift will result in a reduction of the company’s headcount, but it will be also offer a way to reduce the production costs of its vehicles by 5-6%. “We will be closing some stores, and there will be a reduction in headcount. Unfortunately, there’s no way around it. We’re sort of in a binary choice. Reduce headcount and sell the $35,000 car and have fewer people, or not provide a $35,000 car,” Musk said.

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Watch Carvana CEO Ernie Garcia’s segment on CNBC’s Squawk Alley in the video below.

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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Investor's Corner

NASA taps SpaceX to launch the telescope that could unlock new worlds

NASA’s Roman Space Telescope heads to orbit this August aboard SpaceX’s Falcon Heavy with massive scientific ambitions.

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SpaceX is set to play a central role in one of NASA’s most anticipated science missions in years. The company’s Falcon Heavy rocket, currently the most powerful operational launch vehicle in the world, will carry the Nancy Grace Roman Space Telescope into orbit on August 30 from Kennedy Space Center in Florida. Roman is now in final preparations inside the Payload Hazardous Servicing Facility, where on June 26 technicians used a crane to lift the observatory into a specialized stand for fueling and pre-launch testing.

Roman is named after Nancy Grace Roman, NASA’s first chief of astronomy, whose career helped shape how the agency approaches space science.

NASA chose SpaceX Falcon Heavy because of Roman’s needs to reach a specific orbit far from Earth, well beyond where a standard Falcon 9 can deliver it. The Falcon Heavy, which first flew in 2018, has since become NASA’s go-to option for missions that need serious muscle without the cost and complexity of older launch systems.

Celebrating SpaceX’s Falcon Heavy Tesla Roadster launch, seven years later (Op-Ed)

Roman will carry a field of view at least 100 times wider than the Hubble Space Telescope, meaning it can photograph enormous swaths of the universe in a single shot rather than the narrow slices Hubble captures. That difference in scale is significant. While Hubble reshaped our understanding of the cosmos over 30 years, Roman is built to work faster and wider, surveying hundreds of millions of galaxies at once.

One of Roman’s most compelling capabilities is its potential to discover and photograph planets orbiting stars outside our solar system, and with enough precision to directly image planets that would otherwise be lost. That means scientists could study the atmosphere and surface characteristics of distant worlds rather than simply confirming they exist. Combined with Roman’s sweeping field of view, the telescope could detect thousands of exoplanets, and some of those planets may be in habitable zones where liquid water could exist. No telescope currently in operation has this level of power and capability. That capability alone could change what we know about other worlds, and perhaps finally answer the question: are we the only intelligent lifeforms in existence? 

What Roman actually finds once it reaches orbit is an open question, and that is exactly what makes this launch worth watching.

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California snubs Tesla in its newly passed EV incentive that favors Rivian and Lucid

California passed a $135 million EV incentive that rewards Rivian and Lucid while sidelining Tesla

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California just drew a line in the EV incentive sand to put Tesla on the wrong side of it. The state recently passed a $135 million program offering first-time electric vehicle buyers a direct incentive with no application required, but the rules were written in a way that leaves Tesla at a structural disadvantage compared to Rivian and Lucid.

The program caps eligible vehicles at $50,000 for new EVs and $25,000 for used ones. That pricing threshold rules out a significant portion of Tesla’s lineup, though some lower-priced Model 3 and Model Y configurations would still qualify. California-based automakers are exempt from the price cap entirely, regardless of what their vehicles cost. Rivian, headquartered in Irvine, and Lucid, based in the San Francisco Bay Area, both benefit from that exemption. Rivian’s R2 starts at roughly $45,000 but has versions above the cap. Lucid’s Air and Gravity start at $70,990 and $79,990 respectively, well above any threshold a non-California company would face.

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Tesla built its reputation and a significant portion of its early market share in California, where EV adoption has consistently led the nation. The company operates its original factory in Fremont, California, and the state was home to Tesla’s headquarters for most of its existence. That changed in 2021 when Tesla moved its corporate headquarters to Austin, Texas. Since then, the relationship between the company and California Governor Gavin Newsom has been openly adversarial, with Musk and Newsom trading public criticism on multiple occasions.

California’s EV incentive landscape has shifted repeatedly in recent years, and Tesla has previously lost eligibility for state-level programs as its vehicles exceeded income-adjusted price thresholds. The federal $7,500 EV tax credit, which Tesla models have qualified for and lost depending on policy cycles, is no longer available after it expired without renewal, making state-level programs more meaningful to buyers than they have been in years.

The practical impact for buyers is more nuanced than the headline suggests. California residents purchasing a Tesla under $50,000 for the first time can still access the incentive. But the exemption written for California-based manufacturers is a structural advantage that rewards where a company plants its headquarters flag rather than where it builds its products, and Tesla moved that flag to Texas.

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SpaceX’s newest logo confirms everything about what it’s become

SpaceX officially absorbed xAI under the SpaceXAI brand, completing the largest private merger in history.

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SpaceX made its corporate transformation official in May 2026 when Elon Musk posted on X that xAI would cease to exist as a standalone company. “xAI will be dissolved as a separate company, so it will just be SpaceXAI, the AI products from SpaceX,” he wrote.

A new SpaceXAI logo was announced today, visually embedding the xAI letters inside the SpaceX identity, which can be seen as a deliberate design choice that signals the merger is not a partnership but a full absorption and XAi a core function of the same company. The same way Starlink is not a separate brand but a SpaceX product. The announcement closed the loop on a process that began February 2, 2026, when SpaceX acquired xAI in the largest private merger in history, valued at $1.25 trillion. SpaceX at $1 trillion and xAI at $250 billion.


The reason SpaceX bought xAI was stated plainly by Musk at the time of the deal: to build orbital data centers. SpaceX had simultaneously filed with the FCC to launch up to one million satellites designed to function as AI compute nodes in low Earth orbit, escaping what Musk described as the energy constraints limiting AI development on Earth.

xAI provided the AI software stack, with Grok, the X platform, and the Colossus supercomputer infrastructure in Memphis with over 220,000 NVIDIA GPUs, while SpaceX provided the rockets, Starlink, and the capital base to fund it. The two companies needed each other. xAI was burning $2.5 billion in losses on $250 million in revenue. SpaceX was generating an estimated $8 billion in profit on $15 billion in revenue and needed an AI narrative to command the valuation it was targeting for its IPO.

SpaceXAI just launched into your kitchen with their new app

What SpaceX has done, regardless of how the orbital AI vision ultimately plays out, is walk into a public market as something no company has been before: a rocket manufacturer, satellite internet provider, AI software company, social media platform, and supercomputer operator under one ticker. Whether that combination is worth $2 trillion depends entirely on which of those businesses you believe in most.

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