Investor's Corner
Tesla is poised to survive 2020’s worst economic shocks; other automakers, not so much
Just before being proven wrong by Tesla’s first-quarter delivery and production numbers, TSLA bears were hard at work, spreading the now-aging narrative that the company’s electric cars will soon see a drop in demand. Hours before Tesla released its numbers, short-seller Jim Chanos even remarked that he remains “maximum short TSLA,” arguing that the company stands to lose money this year.
What the noted short-seller failed to mention was that this year would likely be downright brutal on the entire auto industry. 2020 only started, but the onset of the coronavirus pandemic has given the whole car market an economic shock that will resonate for a substantial period of time. Tesla will see adverse effects, most likely in the second quarter, but compared to the rest of the industry, the electric car maker may very well be poised to be a company that can not only survive, but thrive in these times of crisis. The same cannot be said for legacy carmakers, or the scheduled “Tesla Killers” that are set to be released in the near future.
Gene Munster of Loup Ventures noted that Tesla’s Q1 production and delivery results show that Tesla is winning despite the current headwinds simply because it has a product that is measurably better than both gas and electric competitors. The Wall Street veteran further added that while the next quarters will be challenging for Tesla and all other automakers like BMW and General Motors, he still expects Tesla to continue reporting 15-25% better delivery results compared to its peers.
A lot of this is due to the company’s products, specifically the Model 3 sedan and the Model Y crossover. Both vehicles are high-volume EVs, and they are designed to disrupt their respective segments. The Model Y, in particular, is designed to be competitive in the crossover market, which happens to be one of the fastest-growing segments in the auto industry today. Munster argued that over time, the price and performance gap between Tesla and its competitors would likely get broader. This is because rivals, such as legacy automakers and their respective EVs, will either have to sell a vehicle that’s at parity with Tesla’s features and range but at a higher price, or a car whose cost is subsidized by the company, resulting in financial strain. For automakers, such is a notable dilemma.
Tesla investor @Incentives101, an economist with a background in macro research, stated in a message to Teslarati that the demand for the electric car maker’s vehicles will largely depend on how distinct they are from other EVs on the market. It’s quite difficult to analyze a product’s demand from a consumer preferences standpoint. In the case of apparel, for example, it is challenging to determine why some consumers prefer Adidas over Nike. The auto industry is quite the same. When one looks at the demand for vehicles, it is difficult to pinpoint why some consumers buy a BMW 3-Series over an Audi A4, or a Mercedes-Benz C-Class; or why some customers buy a Honda Accord instead of a Toyota Camry.
Explaining further, the economist noted that instances such as these usually mean that the products consumers are purchasing are almost perfect substitutes for each other. If one were to study the size, efficiency, performance, and price of any category of cars, one would see that the differences are usually so marginal between each option and segment that consumer decisions often fall on subjective variables such as looks or brand loyalty. This is something that veteran automakers such as Ford rely on, with the company being proud of F-150 owners sticking with the company for years, or at times, even generations.
In the auto sector, there are various tradeoffs that customers are likely to compromise with. For buyers of cars with an internal combustion engine, opting for a low price will likely sacrifice performance, as is the case with the Toyota Camry. Buyers of electric vehicles from traditional automakers, on the other hand, will probably sacrifice something vital such as range for performance, as is the case with the Porsche Taycan. Tesla’s electric vehicles have pretty much eliminated these tradeoffs over time, largely thanks to the company’s own experience in producing and designing electric vehicles and their unique vertical integration, which provides the company unprecedented control over their products and the way they function.
Amidst the coronavirus pandemic, the health and economic shock that the world is facing are unprecedented. These shocks affect everyone, and for automakers, it will all come down to whoever can recover the fastest. Veteran automakers are fighting at a disadvantage as Tesla extends its gap in performance and tech. Tesla, on the other hand, may very well be poised to hit the ground running and crush its competitors in the process. The Model 3 and Tesla’s first-quarter results highlighted how demand for the company’s vehicles would likely be steady. As for demand concerns about Tesla, the economist noted that such concerns remain overblown.
“Until today, demand concerns about Tesla vehicles are overblown and based on a poor understanding of economics. Demand is a function of consumer preferences, basically what consumers value. It is also a function of income, price of substitutes, and few other things. How much each of these variables affects demand is not static. It may be that consumer preferences don’t change but income does, so in a scenario of rapid economic downturn with relatively fast recovery demand for Tesla would behave the same,” the economist wrote.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
OpenAI cites distrust of SpaceX in decision to drop Cursor partnership
OpenAI will cut SpaceX-owned Cursor’s model access in November, citing Musk’s history of broken contracts.
OpenAI, the company behind ChatGPT, announced late Friday that it is ending its partnership with Cursor, cutting off the coding tool’s access to its models on November 12. The move comes two weeks after SpaceX completed its $60 billion acquisition of Cursor’s parent company, Anysphere, folding the popular AI coding assistant into Elon Musk’s growing SpaceXAI division.
In a post on its website, OpenAI said the decision came down to trust, not technology. “We cannot be confident that SpaceX will use our technology within our terms of service, based on our experience with Elon Musk’s companies violating contracts,” the company wrote. OpenAI pointed to two specific incidents: X, now part of SpaceX, allegedly breaking the terms of an existing OpenAI contract after Musk bought Twitter.
That lawsuit is the backdrop for all of this. Musk cofounded OpenAI in 2015, left the board in 2018, and sued Sam Altman and Greg Brockman in 2024, arguing they abandoned the company’s nonprofit mission for profit. A federal jury sided with OpenAI in May, finding Musk waited too long to sue rather than ruling on the merits of his claims. Musk said at the time he would appeal to the Ninth Circuit, calling the outcome a “calendar technicality” rather than a real judgment.
SpaceX’s interest in Cursor predates that verdict by weeks. The company first struck a deal with Cursor in April, securing an option to acquire it for $60 billion or pay $10 billion for joint development work instead. As Teslarati reported at the time, the logic was straightforward: Cursor was paying retail prices to Anthropic and OpenAI, two of its most direct competitors, every time a developer used its product, while SpaceX had idle capacity on its Colossus supercomputer, roughly the equivalent of a million Nvidia H100 GPUs, that Cursor could use to train its own models instead. SpaceX exercised the option in June, days after its own IPO, and the deal closed in mid-August.
Once it closed, Musk moved fast. On an all-hands call with more than 1,000 Cursor employees, he reportedly told staff that SpaceXAI’s Grok was playing catchup in the AI race, unlike Tesla and SpaceX in their own markets, and singled out Anthropic as the company to catch. Cursor CEO Michael Truell now reports directly to Musk inside SpaceXAI.
Losing OpenAI’s models leaves Cursor leaning harder on Anthropic’s Claude, which has its own compute agreement with SpaceX, and on Cursor’s in-house Composer model, the one SpaceX’s compute was supposed to accelerate in the first place. OpenAI framed the November deadline as maximum notice under its contract, and said it wants to “go above and beyond” to help developers through the transition. Whether Anthropic makes the same call is now the open question in AI coding.
Investor's Corner
Tesla Robotaxi gets a massive upgrade in Nevada
Nevada regulators just approved a massive expansion of Tesla’s robotaxi fleet across the entire county.
Tesla’s robotaxi footprint in Nevada just grew by roughly 500 times in a single regulatory vote.
The Nevada Transportation Authority approved Tesla’s full Autonomous Vehicle Network Company permit on Thursday, clearing the way for the company to deploy up to 5,000 driverless vehicles across Clark County over the next 12 months. The decision came during a four hour general session meeting that Tesla investor Sawyer Merritt watched live and reported on X, noting the vote replaces the interim order that had limited Tesla to just 10 robotaxis on a narrow stretch of the Las Vegas Strip.
EXCLUSIVE: Tesla has just officially received approval for its full Autonomous Vehicle Network Company permit in Nevada, clearing the way for Tesla to launch a paid public Robotaxi service in Las Vegas.
This officially allows @Tesla to deploy up to 5,000 robotaxis over the next… pic.twitter.com/DPs5UtUlrE
— Sawyer Merritt (@SawyerMerritt) August 20, 2026
That earlier cap, covered here after it surfaced on August 13, came with restrictions that looked stricter than what Tesla runs in Austin: a 45 mph speed ceiling, no airport pickups, and a geofence confined to the Strip corridor. The new approval extends Tesla’s operating authority to all of Clark County, with room to request an even wider geofence across the state.
Tesla representatives at the meeting said they have no intention of putting 5,000 cars on the road right away. Commercial rides are expected to start within 30 days, pending vehicle inspections, insurance filings, and fare approval, the standard steps every robotaxi operator in Nevada has had to clear.
Tesla’s own Robotaxi account replied to the news with a short line, The golden future is upon us.
The timing lines up with Tesla’s broader robotaxi push this month. The company is preparing to open Cybercab rides to the public in Austin as soon as this month, and it opened a sweepstakes for riders to win a seat at the launch event. Tesla filed its original application for a 5,000 vehicle Nevada fleet back in June, a request regulators trimmed to 10 vehicles when they issued the interim order in July. Thursday’s vote effectively grants the number Tesla asked for from the start.
Zoox, the Amazon owned robotaxi operator, has run in Nevada since 2025 and was capped at 100 vehicles before Thursday’s decision. Tesla’s new ceiling puts it well ahead of that comparison on paper, though the company has said its actual fleet size will depend on how quickly FSD v15 rolls out, the software update executives have called the gateway to scaling unsupervised robotaxi operations nationwide.
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
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.
OpenAI cites distrust of SpaceX in decision to drop Cursor partnership
Tesla Theater might be getting plenty more streaming platforms
