U.S. President Donald Trump formally launched tariffs on imports from Canada, Mexico, and China over the weekend, a decision that is widely expected to have sweeping implications for Tesla, other automakers, and a broad range of other industries.
The Trump administration announced the news on Saturday, effectively establishing a 25-percent tariff on Canadian and Mexican imports as well as a 10-percent tariff on products from China. The tariffs will go into effect on Tuesday, and they have already caused ripple effects and a larger trade war with some of the companies.
Canada Prime Minister Justin Trudeau and Mexico President Claudia Sheinbaum spoke on the phone over the weekend, and while Sheinbaum hasn’t yet formalized or disclosed plans for counter-tariffs, Trudeau announced some on Saturday evening, according to Reuters. In the announcement, the Prime Minister said that Canada with also establish a 25-percent tariff on $155 billion worth of products from the U.S.
Trudeau has said that the government will release an updated list of products and tariff details, though the initial list included products such as certain appliances, beer, wine, lumber and other goods. He also says that the government plans to start with $30 billion on Tuesday, as followed by the additional $125 billion later this month.
The Trump administration says the tariffs are aimed at “addressing an emergency situation” related to the import of illegal drugs including fentanyl, along with pointing the blame at illegal immigrants.
“President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” the White House writes on its fact sheet dedicated to the order.
You can see the full fact sheet from the White House here, or check out the full executive order here.
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On Sunday, Trump also followed up with a post on his Truth Social account in response to criticism:
The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the “Stupid Country” any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example? THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.
Following a repost of Trump’s words on X, community notes pointed to a TD Economics saying that the U.S. has had a trade surplus with Canada for the last sixteen years straight when not including the energy sector, or oil, natural gas and electricity.
Multiple others have weighed in on how the tariffs could affect the industry at large, highlighting the potential for price increases for the consumer, potential layoffs, and some even saying that it will shut the auto industry down altogether.
In a report from Bloomberg on Sunday, Flavio Volpe, the President of the Canada Automotive Parts Manufacturers’ Association, said that he doesn’t think the country’s auto parts makers will be able to remain profitable with the tariffs in place.
“The auto sector is going to shut down within a week,” Volpe said. “At 25 percent, absolutely nobody in our business is profitable by a long shot.”
Others have warned of even more immediate effects, especially for Canadian and Mexican cities and states whose communities rely heavily on automotive manufacturing. One such city includes Windsor, Ontario, where John D’Agnolo, the union president of a local Ford factory there, says substantial numbers of layoffs could be imminent.
“We’re talking about thousands and thousands of jobs being lost,” D’Agnolo said. “We’d truly be a ghost town, here in Windsor, if we lost this type of business.”
Ontario Premier Doug Ford has also warned that it could affect as many as 500,000 jobs across the province, which is Canada’s most populated, with many of those being automotive roles.
Many also expect the increased costs to be passed onto the consumer, though it’s still unclear exactly what the repercussions of the tariffs could be. We could also see businesses absorb some or all of these costs, though some initial research seems to suggest that buyers will see higher sticker prices across the industry.
“It is going to be a lot of impact,” Aruna Anand, chief executive officer of parts supplier Continental AG’s North American business, said in an interview. “The question is who is absorbing the price and it becomes, are we able to absorb that price or is it going to be shifted to the end consumer?”
In a separate report from Reuters on Saturday, it was suggested that automakers such as General Motors (GM) and Toyota could, however, shift more production from overseas factories to those in the U.S., while major aluminum manufacturer Alcoa is considering re-routing plans that could potentially reduce tariffs. Many electric vehicle (EV) battery materials also come from metal mining operations in China, with some of these sectors just beginning to emerge domestically.
Others also report that the move could “undermine competitiveness” in the American auto industry, ultimately increasing the cost of building cars in the U.S.
“Our American automakers … should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce,” says Matt Blunt, the President of the American Automotive Policy Council, which represents Stellantis, GM and Ford.
During Tesla’s Q4 earnings call last week, Chief Financial Officer Vaibhav Taneja also warned that tariffs could affect profitability for the company, since its all of its production facilities utilize parts from around the globe.
“There’s a lot of uncertainty around tariffs,” Taneja said. “Over the years, we’ve tried to localize our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely, will have an impact on our business and profitability.”
It’s still not quite clear at this time how the tariffs may affect Tesla’s prices. While Tesla has regularly advertised having the “most American-made cars” with final assembly for the market taking place at its factories in Texas and California, the company also gets a significant amount of components from Canada.
In a filing with the National Highway Traffic Safety Administration (NHTSA) in October, Tesla did disclose what percentage of its vehicle parts are made in either Canada or the U.S., as compared to other countries such as Mexico and Japan. Some of the figures also don’t disclose where the remaining amounts come from, though they can give users an idea of how many components come from Mexico compared to either the U.S. or Canada.
You can see that data for Tesla’s vehicles below, though it’s also worth noting that it does not show the ratio of U.S. to Canadian parts—just a combined percentage from the two countries. You can also view the full filing from the NHTSA here.
- Cybertruck: 65 percent from U.S. and Canada; 25 percent from Mexico
- Model 3 Long Range: 75 percent from U.S. and Canada; 20 percent from Mexico
- Model 3 Performance: 70 percent from U.S. and Canada; 20 percent from Mexico
- Model Y (all trims): 70 percent from U.S. and Canada; 25 percent from Mexico
- Model S: 65 percent from U.S. and Canada; 20 percent from Mexico
- Model X: 60 percent from U.S. and Canada; 25 percent from Mexico
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.
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Elon Musk said weeks ago during SpaceX’s third-quarter earnings call that the company’s Grok Bot, its autonomous AI Agent platform, was showing “the fastest growth of a product” that he’d ever seen in his life.
Now, SpaceXSI is scaling back Grok Bot users’ weekly limits, much to the surprise of those who have relied on it to take away monotonous tasks in their lives.
Elon Musk’s terse November 1 reply on X captured a sharp tension in the early days of agentic AI. Responding to a user who asked for a Grok Bot usage reset after hitting 100 percent with four days still left on the weekly cycle, Musk wrote: “The cost of serving Grok Bot was unsustainably high relative to revenue.”
@DogecoinNorway The cost of serving Grok Bot was unsustainably high relative to revenue
— Elon Musk (@elonmusk) November 1, 2026
The post arrived amid a wave of similar complaints from paying subscribers whose meters had jumped unexpectedly toward or to the limit, sometimes overnight and with little corresponding activity. It also stood in clear contrast to statements Musk had made only days and weeks earlier.
On the SpaceX third-quarter earnings call in mid-to-late October, Musk had described Grok Bot in almost the opposite terms. He called it “the fastest growth of a product that I’ve ever seen in my life” and said he had “never seen anything grow this fast.”
Company figures put paid weekly users at roughly 800,000 earlier in the month, more than doubling over the prior period. Daily active users had climbed from under 100,000 in early September to over 600,000 by late October.
Musk emphasized that the product has no free tier and that users appear to be getting real value beyond what they pay. In other remarks, he noted that usage per user was rising rather than declining, the opposite of the usual decay pattern for new software.
Grok Bot, launched around August, functions as an always-available agent with its own persistent cloud computer; it can schedule, research, shop, browse, and execute multi-step workflows even after the user steps away. Access is bundled into X subscription tiers (roughly $30, $100, and $200 per month) and certain Cursor plans, drawing from shared weekly usage pools whose exact sizes have not been publicly detailed.
The economics of that model are what Musk’s November 1 post put in the spotlight. Agentic systems burn far more compute than ordinary chatbot exchanges. Each task can trigger repeated model calls, tool use, web actions, and sustained background work.
When growth is as rapid as Musk celebrated, the absolute compute bill scales quickly even if average revenue per user stays fixed under flat monthly subscriptions. Industry observers noted the opportunity cost as well: the same GPUs can be rented to other AI labs at higher rates.
A simple back-of-the-envelope comparison circulating after the post illustrated the gap: if every reported daily user paid the top tier, annualized subscription revenue would still be modest relative to the scale of compute infrastructure SpaceX is building and leasing to companies like Anthropic.
Some users also reported possible dashboard anomalies around the same period, though Musk’s framing treated the underlying cost-revenue imbalance as the core issue rather than a pure metering glitch.
The juxtaposition is the core of this exchange. Within roughly two weeks of publicly framing Grok Bot as an unprecedented success with strong unit economics and no free tier, Musk acknowledged that serving the same product had become unsustainable relative to the revenue it generates.
For the broader industry, the episode underscores a structural challenge of the agent era: demand is real and growing faster than many expected, yet the cost of fulfilling that demand through always-on, multi-step agents can outrun subscription pricing before companies can adjust limits, introduce metered billing, or raise prices.
Musk’s reply did not promise an immediate reset or higher allowances; it simply stated the constraint. In doing so, it supplied a rare, explicit public data point on the unit economics of a high-profile AI agent just as adoption numbers were still being celebrated as the fastest in Musk’s experience.
The tension between rapid, paid growth and the compute required to deliver it is now on the record.
Elon Musk
Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit
Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.
Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.
Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.
Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.
The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”
Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”
The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.
Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.
Elon Musk
SpaceX President to gift Trump Accounts her SpaceX stock
Gwynne Shotwell’s 2 million SpaceX shares are headed to children’s Trump Accounts starting this December.
SpaceX President Gwynne Shotwell said Friday that more than 2 million SpaceX shares belonging to her and her husband, Robert, will be distributed to children’s Trump Accounts in December, turning a pledge she made over the summer into an actual transfer. “Robert and I are thrilled that our gift of over 2 million shares of SpaceX stock will be distributed to children’s Trump accounts in December!” Shotwell wrote on X, adding that the shares are “transferring to escrow as we speak.”
The first round goes to children aged 11 to 17 who live in ZIP codes where the median family income is $57,000 or less, along with kids in ZIP codes with too few residents for the Census to report that figure. Shotwell said those families should receive a notice by Monday, Reuters reported.
A second gift is expected to be finalized in the next few weeks. That round will cover eligible children in military families serving overseas, children in foster care, and more kids in Texas counties near the Shotwells’ home where median family income is $90,000 or less. Elon Musk replied to the announcement with “Cool” and a heart emoji.
Shotwell first announced the donation on July 6, less than a month after SpaceX priced its record IPO at $135 per share on the Nasdaq. IPO filings showed Shotwell owned about 12.6 million SpaceX shares, Quartz reported at the time, which makes the gift roughly one sixth of her stake. At the roughly $146 per share used to value Musk’s own pledge earlier this month, 2 million shares are worth about $290 million.
How the stock would actually reach the accounts had been an open question since July. Treasury guidance acknowledged that stock donations could flow into Trump Accounts, but it did not explain the mechanics for a program whose contributions default into an S&P 500 index fund. Shotwell thanked the Treasury, the IRS, the Dell Foundation, Greater Horizons, Invest America and the law firms Morgan Lewis and Gibson Dunn for “working over the past few months to make this happen.”
The transfer also works as a dry run for a far larger gift. On October 19, Musk said he would give one of his SpaceX shares to every kid in America next year and called it “the first of many.” With roughly 72 million children in the country, that pledge is worth about $10.5 billion. President Donald Trump thanked Musk the same day and said the shares would go through Trump Accounts, though neither SpaceX nor the Treasury has published how or when that distribution will happen.
Shotwell’s recipients also fill a gap in the program itself. Trump Accounts launched on July 4, and the $1,000 Treasury deposit only goes to babies born between 2025 and 2028. Teenagers aged 11 to 17 receive no government seed money, so for many of the families getting a notice on Monday, SpaceX stock will be the first asset in the account. The accounts convert into retirement accounts when the child turns 18.
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