The growth needed to transition to electric vehicles
Tesla
Elon Musk's new master plan isn't ready yet. Tesla's CEO was asked about the company's five-year plan and his updated master plan at the stakeholder's meeting in August. While he didn't get into specifics, Tesla's head of investor relations reportedly did spill the beans at a Goldman Sachs invite-only tech conference. Martin Viecha gave one of the world's largest investment banks plenty of details on how the company will look and what will be accomplished by 2027-28.
Business Insider quoted the Tesla employee stating, "EV architecture is so different from internal combustion engine, it allows for a third revolution in automotive manufacturing."
Undoubtedly, Tesla has led the way in the electric vehicle space. However, that space is getting more competitive, with longer-established auto manufacturers ramping up electric vehicle production.
The audience of investors wanted to hear how Tesla would compete. Viecha repeated numbers from Tesla's second quarter earnings call. The cost of building the product has dropped by more than half in the last seven years.
He said in 2017, it cost $84,000 to make one of their vehicles, but it is now down to $36,000. Incredibly, those cost savings were not from batteries or supplies but from better vehicle designs and optimizing factories. Viecha said the cost per car manufactured is the most critical metric to monitor. It dictates how many vehicles can be built and just how big Tesla can become. He clarified that the company will continue to find ways to lower production costs.
With the falling cost of production, the interest in a less expensive Tesla continues to rise. While the term, Model 2 (Details on Model 2), was not reported, it's no secret that this has been on the company's radar for some time. Viecha says the company wants to be a high-volume automaker. Therefore, a more affordable option is necessary to broaden the portfolio.
However, the demand for the Model 3 and the Model Y is still so high that a new Model is not needed any time soon. That's an essential point because the head of investor relations said that a cheaper Tesla would be used in the Robotaxi (everything we know about the Robotaxi) production.
Of course, the investors needed some reassurance about Full Self-Driving. Musk has publicly stated that FSD can make the company worth a lot. Viecha said that supervised FSD is underway. He said more than 100,000 people are using FSD in the United States. However, he reiterated the point that the only way the system can improve is by collecting data.
Also, interesting to note that Viecha assigned generation numbers to Tesla products. The first generation is the Model S and Model X. While the second generation is the Model 3 and Model Y. He referred to Robotaxi and presumable the Model 2 as the third generation. However, with the Tesla Semi ready to roll and the Cybertruck coming next year, perhaps he wants to revise the generation breakdown for the next investor meeting.
Subscribe
Subscribe to our newsletter to stay up to date on the latest Tesla news, upcoming features and software updates.
The massive legislative effort titled the "Big Beautiful Bill" is taking direct aim at what has become one of Tesla’s most critical and profitable revenue streams: the sale of US regulatory credits. The bill could eliminate billions of dollars from Tesla’s bottom line each year and will slow down the transition to electric vehicles in the US.
The financial stakes for Tesla are absolutely immense. In 2024, Tesla generated $2.76 billion from selling these credits. This high-margin revenue was the sole reason Tesla posted a profit in Q1 2025; without the $595 million from regulatory credits, Tesla’s reported $409 million in profit would have been a $189 million loss.
How the ZEV Credit System Works
Zero-Emission Vehicle (ZEV) credits are part of state-level programs, led by California, designed to accelerate the adoption of electric vehicles. Each year, automakers are required to hold a certain number of ZEV credits, with the amount based on their total vehicle sales within that state. Under this system, automakers that fail to sell a certain percentage of zero-emission vehicles must either pay a significant fine or purchase credits from a company that exceeds the mandate.
Automakers who fail to sell enough EVs to meet their quota have a deficit and face two choices: pay a hefty fine to the state government for each missing credit (for example, $5,000 per credit in California) or buy credits from a company with a surplus.
As an all-EV company, Tesla generates a massive surplus of these credits. It can then turn around and sell them to legacy automakers at prices cheaper than the fine, creating a win-win scenario: the legacy automaker avoids a larger penalty, and Tesla gains a lucrative, near-pure-profit revenue stream.
This new bill will dismantle this by eliminating the financial penalties for non-compliance, which would effectively make Tesla’s credits worthless. While the ZEV program is a state law, the Big Beautiful Bill will fully eliminate the penalties at a federal level.
A Multi-Billion Dollar Impact
The removal of US ZEGV credits would be a severe blow to Tesla’s financials. One JPMorgan analyst estimated that the move could reduce Tesla’s earnings by over 50%, representing a potential annual loss of $2 billion. While Tesla also earns similar credits in Europe and China, analysts suggest that 80-90% of its credit revenue in Q1 2025 came from US programs.
Why the Program Exists
While the impact on Tesla would be direct and immediate, the credit system has a wider purpose. It creates a strong financial incentive for legacy automakers to develop and accelerate their zero-emission vehicle programs, whether it’s hydrogen, electric, or another alternative.
Eliminating the need for these credits would remove that financial pressure. This could allow traditional automakers to slow their EV transition in the US without the fear of a financial penalty, potentially leading to fewer EV choices for consumers and a slower path to vehicle electrification in the country.
Big, But Not Beautiful
On Sunday Morning TV, Elon Musk was asked his thoughts on the Big Beautiful Bill. They were pretty simple. A bill could be big, or it could be beautiful - I don’t know if it can be both, Musk stated.
Elon Musk in new interview: "I was disappointed to see the massive spending bill, frankly, which increases the budget deficit and undermines the work the DOGE team is doing. I think a bill could be big, or it could be beautiful—I don't know if it can be both." pic.twitter.com/DnyjHN7xCY
The bill poses a threat to Tesla’s bottom line and to the adoption of EVs in the US market, where automakers will no longer have a financial incentive to transition to cleaner vehicles, a market they’ve regularly struggled in when competing against Tesla.
Tesla will have to work carefully in the future to cut expenses to remain profitable after the elimination of these regulatory credits.
Tesla is rolling out a thoughtful and much-needed update to its in-vehicle Supercharger UI. The update is designed to provide drivers with details about Superchargers and their locations.
The update will add new icons and contextual messages to clarify Supercharger access requirements or restrictions, such as paid parking. There’s nothing worse than navigating to a Supercharger only to find out it's only for customers, requires paid parking, or some other service.
The new details will appear in various locations, including the Supercharger list, Supercharger module, and above the navigation directions when navigating to a Supercharger.
The new Supercharger icons will indicate the following requirements:
Valet-only Parking
Pay to Park
Access Codes
Parking Floor (the floor the Supercharge is on in a parking garage)
These icons are initially displayed when you’re searching for a Supercharger in the list of Superchargers. Additionally, when navigating to a site that includes any of the above, your vehicle will now display specific alerts for access requirements.
Access Codes and Parking Floor information will be provided above the navigation card when you reach the destination.
Solving Common Frustrations
Not a Tesla App
While these may seem like minor tweaks, they are a direct solution to some long-standing and common frustrations for many Tesla owners. Many drivers have likely experienced the scenario of following navigation to an unfamiliar urban Supercharger, only to arrive and discover it’s buried deep within a paid parking garage, with no advance warning of the fees or specific floor location.
This update provides all the critical information upfront so that drivers can make informed decisions on where they would like to charge. No more surprise parking fees, no circling a multi-level garage at 3% battery, desperately searching for the red and white Supercharger signs, and no more getting stuck searching for an access code to charge.
Little Details Matter
These Supercharger updates are the definition of quality-of-life improvements. Little details that make a big difference in usability.
As the Supercharger network continues its massive expansion into more complex and densely populated urban centers, providing this kind of granular, logistical data becomes increasingly important.
Release Date
While Tesla hasn’t announced when these features will be added, they’ll likely be included in the next major Tesla software update, presumably update 2025.24 or 2025.26.
The Tesla app was recently updated to v4.46.5 and added the ability to restrict location visibility for other drivers of the vehicle. Although the app update didn’t include these Supercharger updates, we expect these new Supercharger details to also be added to the Tesla app soon.
