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Volkswagen, a rocky $50B EV bet, and the bid to chase Tesla’s software prowess
Among the old guard of the automotive industry, very few could hold a candle to Volkswagen, which has initiated a $50 billion bet on electric vehicles. The plan, it seemed, was aimed at ensuring that the veteran automaker could catch up to Tesla, a dedicated EV maker that has made a name for itself by releasing vehicles that receive over-the-air updates on a regular basis.
Yet as the first result of Volkswagen’s dedicated EV efforts, the ID.3, rolled off the assembly line, it became clear that releasing software-driven electric cars was not as simple as building the next iteration of the Golf. When the ID.3 was released, the vehicle was incomplete. It could drive, turn corners, and basically do anything that regular cars are expected to do. Software-wise, however, it was nowhere near done. Features that were promised were absent, and promised capabilities such as over-the-air updates were unavailable.
Even the ID.3’s heads-up display, a feature that is not present in rivals like the Model 3, didn’t function. Early users of the vehicle also reported hundreds of software bugs. By June last year, Volkswagen decided to delay the ID.3’s launch and sell the first batch of the cars without full software. The vehicles are expected to receive an update that would provide the ID.3 with its full feature set, but the initiative will require a service visit around February 2021.
As noted in a report from The Wall Street Journal, Volkswagen’s issues with the ID.3 were the result of the veteran automaker not being proficient in software. For years, industry analysts and leaders alike have suggested and peddled the “Tesla Killer” narrative, suggesting that once the big players of the auto industry get serious about electric vehicles, Elon Musk’s EV startup would be completely overrun. As it turned out, building electric cars was not as simple. Just because a company can produce good gas and diesel-powered cars does not mean that they can produce good EVs.
Karsten Michels, a senior engineer for Continental AG, one of the firms which Volkswagen tapped to develop the ID.3’s software, noted that the gravity of the task surrounding the development of custom vehicle software was underestimated. “Maybe we underestimated how much work is involved and how little we could actually rely on existing legacy software,” Michels said.
Peter Rawlinson, CEO of Lucid Motors, expressed his thoughts on the situation. “(Ever since Tesla launched its first car in 2008) there was this feeling that the really serious players are going to come. Now, the Germans have finally come, and they’re not as good as Tesla,” he remarked.
Volkswagen, for its part, seems to be taking the lessons it learned during the ID.3 rollout and is applying it for the release of the ID.4, a crossover SUV that could rival the Tesla Model Y. Herbert Diess, the Chairman of the Board of Management of Volkswagen Group and an executive who has struck a friendship of sorts with Tesla CEO Elon Musk, initiated efforts to overhaul the company’s software strategies. If successful, the ID.4, which will be produced in Europe, China, and the United States, would deliver on the promises set forth by the ID.3.
Ultimately, Volkswagen has learned a notable yet painful lesson during the ramp of the ID.3, the most notable of which is that software is something that legacy automakers still need to work on. Granted, software has been running in gas-powered cars for years, with average vehicles including dozens of parts with chips that are designed to perform specific tasks. EVs, however, require a different type of software, one that is more akin to those used by smartphones today. With electric cars, in-vehicle software becomes the heart of the vehicle, with updates becoming the equivalent of service visits in a gas-powered car. In-vehicle software today is never complete as well, as they must always be open to improvements.
Danny Shapiro, senior director of automotive at Nvidia, related his thoughts on the complexity of in-vehicle software. “The key here is taking this distributed system in the car, dozens if not hundreds of applications, and centralizing everything. This is very complex, especially with a car where the safety level is critical. You can’t just flip a switch and be a software company,” he noted.
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Tesla says its Texas lithium refinery is now operational and unlike anything in North America
Elon Musk separately described the site as both the most advanced and the largest lithium refinery in the United States.
Tesla has confirmed that its Texas lithium refinery is now operational, marking a major milestone for the company’s U.S. battery supply chain. In a newly released video, Tesla staff detailed how the facility converts raw spodumene ore directly into battery-grade lithium hydroxide, making it the first refinery of its kind in North America.
Elon Musk separately described the site as both the most advanced and the largest lithium refinery in the United States.
A first-of-its-kind lithium refining process
In the video, Tesla staff at the Texas lithium refinery near Corpus Christi explained that the facility processes spodumene, a lithium-rich hard-rock ore, directly into battery-grade lithium hydroxide on site. The approach bypasses intermediate refining steps commonly used elsewhere in the industry.
According to the staff, spodumene is processed through kilns and cooling systems before undergoing alkaline leaching, purification, and crystallization. The resulting lithium hydroxide is suitable for use in batteries for energy storage and electric vehicles. Tesla employees noted that the process is simpler and less expensive than traditional refining methods.
Staff at the facility added that the process eliminates hazardous byproducts typically associated with lithium refining. “Our process is more sustainable than traditional methods and eliminates hazardous byproducts, and instead produces a co-product named anhydrite, used in concrete mixes,” an employee noted.
Musk calls the facility the largest lithium refinery in America
The refinery’s development timeline has been very impressive. The project moved from breaking ground in 2023 to integrated plant startup in 2025 by running feasibility studies, design, and construction in parallel. This compressed schedule enabled the fastest time-to-market for a refinery using this type of technology. This 2026, the facility has become operational.
Elon Musk echoed the significance of the project in posts on X, stating that “the largest Lithium refinery in America is now operational.” In a separate comment, Musk described the site as “the most advanced lithium refinery in the world” and emphasized that the facility is “very clean.”
By bringing large-scale lithium hydroxide production online in Texas, Tesla is positioning itself to reduce reliance on foreign refining capacity while supporting its growth in battery and vehicle production. The refinery also complements Tesla’s nascent domestic battery manufacturing efforts, which could very well be a difference maker in the market.
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Tesla Optimus V3 gets early third-party feedback, and it’s eye-opening
Jason Calacanis’ remarks, which were shared during a discussion at CES 2026, offered one of the first third-party impressions of the yet-to-be-unveiled robot
Angel investor and entrepreneur Jason Calacanis shared some insights after he got an early look at Tesla’s upcoming Optimus V3. His remarks, which were shared during a discussion at CES 2026, offered one of the first third-party impressions of the yet-to-be-unveiled robot.
Calacanis’ comments were shared publicly on X, and they were quite noteworthy.
The angel investor stated that he visited Tesla’s Optimus lab on a Sunday morning and observed that the place was buzzing with energy. The investor then shared a rare, shocking insight. As per Calacanis, Optimus V3 will be so revolutionary that people will probably not even remember that Tesla used to make cars in the future.
“I don’t want to name drop, but two Sundays ago, I went to Tesla with Elon and I went and visited the Optimus lab. There were a large number of people working on a Sunday at 10 a.m. and I saw Optimus 3. I can tell you now, nobody will remember that Tesla ever made a car,” he noted.
The angel investor also reiterated the primary advantage of Optimus, and how it could effectively change the world.
“They will only remember the Optimus and that he is going to make a billion of those, and it is going to be the most transformative technology product ever made in the history of humanity, because what LLMs are gonna enable those products to do is understand the world and then do things in the world that we don’t want to do. I believe there will be a 1:1 ratio of humans to Optimus, and I think he’s already won,” he said.
While Calacanis’ comments were clearly opinion-driven, they stood out as among the first from a non-Tesla employee about Optimus V3. Considering his reaction to the humanoid robot, perhaps Elon Musk’s predictions for Optimus V3 might not be too far-fetched at all.
Tesla has been careful with its public messaging around Optimus V3’s development stage. Musk has previously stated on X that Optimus V3 has not yet been revealed publicly, clarifying that images and videos of the robot online still show Optimus V2 and V2.5, not the next-generation unit. As for Calacanis’ recent comments, however, Musk responded with a simple “Probably true” in a post on X.
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Tesla taps Samsung for 5G modems amid plans of Robotaxi ramp: report
The move signals Tesla’s growing focus on supply-chain diversification and next-generation communications as it prepares to scale its autonomous driving and robotaxi operations.
A report from South Korea has suggested that Samsung Electronics is set to begin supplying 5G automotive modems to Tesla. If accurate, this would mark a major expansion of the two companies’ partnership beyond AI chips and into vehicle connectivity.
The move signals Tesla’s growing focus on supply-chain diversification and next-generation communications as it prepares to scale its autonomous driving and Robotaxi operations.
Samsung’s 5G modem
As per industry sources cited by TheElec, Samsung’s System LSI division has completed development of a dedicated automotive-grade 5G modem for Tesla. The 5G modem is reportedly in its testing phase. Initial supply is expected to begin in the first half of this year, with the first deployments planned for Tesla’s Robotaxi fleet in Texas. A wider rollout to consumer vehicles is expected to follow.
Development of the modem began in early 2024 and it required a separate engineering process from Samsung’s smartphone modems. Automotive modems must meet stricter durability standards, including resistance to extreme temperatures and vibration, along with reliability over a service life exceeding 10 years. Samsung will handle chip design internally, while a partner company would reportedly manage module integration.
The deal represents the first time Samsung has supplied Tesla with a 5G vehicle modem. Tesla has historically relied on Qualcomm for automotive connectivity, but the new agreement suggests that the electric vehicle maker may be putting in some serious effort into diversifying its suppliers as connectivity becomes more critical to autonomous driving.
Deepening Tesla–Samsung ties
The modem supply builds on a rapidly expanding relationship between the two companies. Tesla previously selected Samsung’s foundry business to manufacture its next-generation AI6 chips, a deal valued at more than 22.7 trillion won and announced in mid-2025. Together, the AI chip and 5G modem agreements position Samsung as a key semiconductor partner for Tesla’s future vehicle platforms.
Industry observers have stated that the collaboration aligns with Tesla’s broader effort to reduce reliance on Chinese and Taiwanese suppliers. Geopolitical risk and long-term supply stability are believed to be driving the shift in no small part, particularly as Tesla prepares for large-scale Robotaxi deployment.
Stable, high-speed connectivity is essential for Tesla’s Full Self-Driving system, supporting real-time mapping, fleet management, and continuous software updates. By pairing in-vehicle AI computing with a new 5G modem supplier, Tesla appears to be tightening control over both its hardware stack and its global supply chain.
Tesla says its Texas lithium refinery is now operational and unlike anything in North America
Tesla Optimus V3 gets early third-party feedback, and it’s eye-opening
