Lifestyle
Despite Tesla’s success, VCs remain slow to invest into electric vehicle startups
This post was originally published on NextMobility.co
As investors continue to become more interested in the future of mobility, electric vehicle startups are commanding significant investment money to disrupt the 120-year-old automotive market. But are Venture Capitalists forking over enough money to move the industry forward in a meaningful way? A new report by tech intelligence platform CB Insights reveals that EV tech startups received $2.2B in funding in 2016. While the amount may seem large, it pales in comparison to the ride-sharing industry, which fetched $10.8B in funding. So the real question is, why are investors still so hesitant to fund the emerging mobility industry?
An Industry Hurt by the Past
Justin Kan, from Y Combinator, on stage during the 2014 TechCrunch Disrupt Europe/London at The Old Billingsgate on October 20, 2014 in London, England. (Photo by Anthony Harvey)
To really understand why VCs are still hesitant to fund electric car startups, it’s important to hear from leaders in the VC space. I reached out to famed startup guru, Justin Kan, to understand why the industry is still hesitant. Kan was the founder of Twitch, sold to Amazon for nearly $1B in 2014, and the brother of Daniel Kan, who is the co-founder of Cruise Automation, which was sold to GM for $1B last year. Kan responded on his new video Q&A platform, Whale, that, “It’s super, super hard to build a car. I think lots of people think that Elon Musk is a unique individual, uniquely capable of building an electric car. But there are many examples of people who have tried and failed, for example, Fisker.”
Kan isn’t wrong; the industry was riddled with very public failures, of which CB Insights highlights in their report. The history of very costly failures could be scaring many investors away from the sector, but when will the public perception change?
Tesla Inc. is arguably the most successful EV startup to date, as the company has now grown to employ over 30,000 workers worldwide and become the most valuable US automaker. Tesla had several VC firms backing the company before they went public in 2010, including DFJ, Capricorn Investment Group, Daimler, Google, DFJ Growth. But most notably, the company saw tens of millions of capital injected by its founder Elon Musk while the company was starting up.
Graphic from CB Insights’ report
While investors are still fighting to get their money in ride-sharing and autonomous vehicle technology companies, it has been clear that electric vehicles hold the best platform for the future of mobility companies. In the report from CB Insights, they highlight the synergies that electric vehicles and autonomous vehicles share. Electric vehicles have fewer components, enabling autonomous electric vehicles to travel nearly 18x more miles than internal-combustion engine vehicles without repairs or expensive operational costs.
Graphic from CB Insights Report
“What would happen if a whole city converted all at once to self-driving cars? … people will be like, ‘This is paradise.’ You just push a button and a car pop ups and takes you wherever you want to go. You have more pedestrian space, and the air smells better.” – Chris Dixon, Partner at Andreessen Horowitz
Investors are certainly taking another look at the industry as more EV startups emerge on the scene with highly qualified engineers, and serious product and production plans underway. Lucid Motors is a prime example of an electric car startup that is emerging as a leading contender within the premium electric vehicle space. The Silicon Valley-based startup is currently looking for funding on its initial factory construction, to the tune of $240M. The company has raised $131M to date, led by CTO Peter Rawlinson, who also led the development of Tesla’s Model S sedan.
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Only time will tell if investors have forgotten about failed EV startups from the past, and willing to make bets on the industry. After all, VCs did invest $120M in Juicero, an in-home juicing machine, that turns out to be completely useless.
Read the CB Insights complete report here.
Lifestyle
Tesla’s driverless Cybercab just passed a big test with State Governor
Florida’s governor rode Tesla’s Cybercab at a closed test track and called the experience impressive.
Florida Governor Ron DeSantis rode in a Tesla Cybercab on a closed test track this week and came away impressed, posting on X that the vehicle “successfully navigated all hazards — a kid running into the street, a crash with police stopping traffic, a Model S cutting us off, etc.” He called the ride “impressive.”
The stop was part of a broader event Monday at SunTrax, a 775 acre state owned proving ground in Auburndale that Florida built specifically to test autonomous and connected vehicles before they reach public roads. Standing next to a gold Cybercab, DeSantis described the car in plain terms: “You go in there and you just sit. You have a screen. There’s no steering wheel, no pedals. Clearly these things could be very beneficial.”
We took a ride on a robotaxi on the Suntrax course and it successfully navigated all hazards — a kid running into the street, a crash with police stopping traffic, a Model S cutting us off, etc.
Impressive! https://t.co/FVAkzFLz3r
— Ron DeSantis (@RonDeSantis) August 11, 2026
DeSantis paired the praise with a caveat that has followed autonomous vehicles since the category existed. “You don’t want to be in an autonomous vehicle and it drives you into a ditch. That would not be good,” he said, framing safety validation as the gate before wider deployment.
SunTrax, the 2.25 mile oval which the state calls the only high speed autonomous vehicle test track in the Southeast, can simulate rain, pedestrian crossings, hills and crowded urban conditions at highway speeds, letting companies push a car past what an early public rollout would risk. Tesla, Waymo and Beep all use the facility, and Florida’s regulatory approach, among the most permissive for autonomous vehicles in the country, doesn’t require a human operator inside a fully autonomous car.
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Tesla has reason to want the blessing of Florida and states beyond, as the Cybercab entered volume production at Gigafactory Texas this spring and has since self certified as SAE Level 4 under Texas law. Public road testing so far has kept a safety monitor in the passenger seat, and Florida is where Tesla has been expanding its existing Model Y based Robotaxi service instead, adding Miami in July and then Orlando and Tampa two weeks later. A closed track endorsement from a sitting governor doesn’t change any of that, but it does put Tesla’s newest hardware in front of a state that has already shown it will move fast on rules.
Elon Musk
The real reason Elon Musk wants every car connected to space
Elon Musk says all cars will eventually need Starlink to handle massive AI bandwidth demand.
Elon Musk is making the case that satellite internet, not fiber or cellular towers, will end up wired into every car on the road. In a string of posts on X, the SpaceX CEO wrote that all cars will have Starlink in the future and called satellite connectivity the only way to get super high bandwidth to billions of vehicles.
The posts started with Musk endorsing a Cloudflare forecast that traffic generated by autonomous AI agents will soon dwarf traffic generated by humans browsing the internet, a shift he described as not a close call at all. From there he narrowed the argument to infrastructure, writing that the only system that can support the insanely fast bandwidth growth needed by AI is Starlink, before extending the logic to cars specifically.
AI agentic Internet traffic will obviously VASTLY exceed human usage. Not a close call at all.
Cloudflare’s forecast is accurate. https://t.co/VztgrinN5k pic.twitter.com/Wo4FiRKjPU
— Elon Musk (@elonmusk) August 9, 2026
The timing lines up with Tesla’s own hardware decisions. On July 20, Tesla confirmed the Cybercab would ship with a Starlink V5 terminal built into its roof, the first time the company had put satellite hardware in a production vehicle. A day later, Tesla’s head of AI, Ashok Elluswamy, explained the connection wasn’t there for safety and that Cybercab’s driving stack runs entirely on onboard cameras and compute, while the satellite link exists for navigation, customer service, and fleet management instead. Musk followed with his own post about the feature, saying riders would be able to watch 4K streaming video during rides.
By July 22, Musk had already said Starlink would extend beyond Cybercab to Tesla’s full lineup. Sunday’s posts push that same logic outward again, this time framed as a requirement across the industry rather than a feature specific to Tesla, and tied directly to the bandwidth AI systems are expected to consume.
SpaceX’s newest Starmind will make earth data centers obsolete
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The AI argument has been building on SpaceX’s side for months. The company has an FCC filing pending for a third generation Starlink constellation, and it has separately proposed Starmind, a constellation of up to a million satellites designed to run AI computation directly in orbit rather than just relay data. Musk has said he expects space to become the cheapest place to deploy AI compute within two to three years. Starlink and Starmind serve different jobs inside that vision, one moving data and the other processing it, but Sunday’s posts treat vehicles as one more category of hardware that will eventually need both.
None of this changes anything for Tesla owners today. Cars already on the road keep running on LTE and Wi-Fi, and Tesla hasn’t outlined a retrofit path for existing vehicles. The July 22 commitment applies to future production, not the fleet already delivered. What Musk added on Sunday is the reasoning: satellite connectivity isn’t a Cybercab novelty, it’s a bet that ground based networks won’t keep up with how much data cars, robots, and AI systems are about to generate.
Elon Musk
The Boring Company’s newest tunnel vehicle runs on Tesla parts and no one is driving it
The Boring Company’s new tunnel vehicle runs on Tesla Model 3 batteries and drive units.
The Boring Company just introduced a new piece of hardware, and it runs on parts pulled straight from a Tesla showroom. Liner Truck 3, unveiled in a post from the tunneling company’s official X account, is an all electric vehicle built around Tesla Model 3 battery packs and drive units, purpose built to move concrete tunnel segments to the boring machine face without a single person underground.
Introducing Liner Truck 3 — our latest fully electric tunnel vehicle.
– Tesla Model 3 battery and drive units
– Transports 22,000+ lb of concrete segments to the boring machine
– 28 miles of range
– 12 mph max operating speed
– Remotely piloted from Global OCC in Texas, with… pic.twitter.com/XB7FgSXnpy— The Boring Company (@boringcompany) August 7, 2026
The job itself is unglamorous but critical. Each precast segment run weighs more than 22,000 pounds, roughly the load of a full cement mixer, and Liner Truck 3 hauls that weight repeatedly between the surface staging area and wherever the Prufrock machine happens to be cutting.
The Boring Company said Liner Truck 3 is piloted remotely out of its Global Operations Control Center in Texas, extending the Zero-People-In-Tunnel approach the company has spent years building toward. An earlier version of a ZPIT liner truck was already tested at the company’s Bastrop, Texas research tunnels, and a factory tour released last month showed an employee flying a fully loaded liner truck with a PlayStation controller. Liner Truck 3 looks like the production version of that same idea, cleaned up and pushed into daily use.
The timing lines up with a company digging in more places than it ever has before. The Boring Company now has multiple Prufrock machines active or arriving in Nashville, where Music City Loop construction has been accelerating since February, and its Vegas Loop network keeps adding tunnel mileage on a near monthly basis. Every one of those projects depends on getting concrete segments to the cutting face fast enough to keep the boring machine from idling, which is exactly the bottleneck Liner Truck 3 is designed to remove.
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It also reinforces something Tesla owners have watched happen gradually across Musk’s companies: passenger car hardware finding a second life in heavy equipment. Model 3 drive units already move people through the Vegas Loop, and now the same components are hauling concrete underground in Nashville and wherever The Boring Company digs next. Whether that kind of component reuse extends further into TBC’s equipment lineup, or into other Musk owned industrial hardware, is the next thing worth watching.
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