Tesla Space #86: the affordable Tesla?

Welcome to the Tesla Space newsletter, our 86^th issue.

Busy week as always. Here’s what’s up in the Tesla space:

• Tesla Q2 earnings call;

• Spy shots from the inside of the more affordable Model Y;

• Robotaxi about to launch in California;

• Samsung will design the AI6 chip for Tesla, in a $16.5B+ deal;

• Starship is launching again in August;

• The Boring Company reveals details on its next underground tunnel system — the Music City Loop — connecting downtown Nashville to airport;

• Neuralink patients #8 and #9 are revealed and share their stories

…and a lot more, as always. Enjoy!

— Jaan

X OF THE WEEK

$TSLA

… is down 1.96% in a week (since Tuesday’s close), now at $325.95 per share. This puts Tesla on a $1.02 trillion market cap.

PS — if you are a Tesla shareholder, you can vote this November on whether Tesla should invest in xAI. Here’s how to make sure you can vote. Things have moved quite a bit with banks all over the world allowing more access thanks to some shareholders like Alexandra Merz there.

TESLA NEWS

I’ll first go over some details from the Q2 2025 Tesla Earnings call.

Find the Shareholder deck pdf here, and the livestream of the Q&A here.

Some of which was shown or discussed:

Tesla says that “Q2 2025 was a seminal point in Tesla’s history: the beginning of our transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services.”

Q2 saw Operating cash flow of $2.5B, Free cash flow of $0.1B and $0.2B decrease in Tesla cash and investments, to $36.8B. Automotive revenues were down 16% year over year, to $16.6B. The total revenue decreased 12% YoY to $22.5B. Tesla says it was impacted by the decline in deliveries, less regulatory credits, reduced price, decline in energy generation and storage revenue (due to lower prices), but growth in Services and Other.

Tesla’s operating income decreased 42% YoY to $0.9B, resulting in a 4.1% operating margin, impacted by less regulatory credits, less vehicle deliveries, increase in operating expenses (restructuring and SBC) driven by AI and other R&D projects, increase in SBC (SBC = stock-based compensation).

Here’s the current factory capacities:

And a look at the slowly declining market share of Tesla among global vehicles across all drivetrains:

This is rather notable:

Seems that cumulative miles driven on FSD has crossed 4.5 billion.

“We expanded AI training compute with an additional 16k H200 GPUs at Gigafactory Texas, bringing Cortex to a total of 67k H100 equivalents.”

On the earnings call, Elon also said 50% of Tesla owners that could try FSD have not tried it even once. How.

First builds of the affordable vehicle were done in June, with “volume production planned for the second half of 2025. Additionally, we continued development of Semi and Cybercab, both slated for volume production in 2026.

There were a few more tidbits from the earnings call that I couldn’t fit here and will relay into next week’s newsletter.

In other news:

• Tesla Diner had protesters out in front of it for a while there, even featuring inflatable figures doing “the” hand signs.

• Watch tip: The X Takeover event created a drone and Tesla lightshow simultaneously: video.

•  Elon thanking the X Takeover crowd on his interview:
  “I would say my heart goes out to you, but I have to watch my gestures these days. I can only point straight ahead or straight up.”
  Find full Elon interview video at X Takeover here.

• All paint colors are now free on Model 3 Performance orders in the US, which means any configuration you choose will now qualify for the $7,500 Federal EV credit (which expires Sept 30), even ones with the white interior.

• I found this one funny:

PS! If you enjoy these reports and want to support us, consider becoming a Tesla Space Insider — it will give you an edge in all things Tesla.

VEHICLES: SMALLER MODEL Y

We’ve seen some spy shots of the potential smaller/affordable Model Y so far with the front and back camouflaged, but this inside shot is perhaps the most telling. What we see as differences:

• No glass roof

• No rear window (?)

• No speaker / tweeter in A-pillar

• No coat hooks

• Looks like textile seats (likely anyway), not-ventilated seats.

• No parcel shelf

• Less leg room. Not confirmed if wheelbase is shorter too.

There’s also a video walkaround of this car here.

• Tesla VP of Vehicle Engineering Lars Moravy on the new Tesla Roadster:
  "Roadster is definitely in development. We did talk about it last Sunday night. We are gearing up for a super cool demo. It's going to be mind blowing; We showed Elon some cool demos last week of the tech we've been working on and he got a little excited."

• IIHS released some of the Cybertruck crash test footage.

• 8 years ago today, the first Tesla Model 3s were delivered to customers.

  Elon announced: "Welcome to production hell." Here’s a video from the livestream back then.

ROBOTAXI, FSD & SOFTWARE

Tesla’s ride-hailing service is launching imminently in California, with a safety driver at the wheel, per new terms robotaxi app users need to agree on.

This is actually a significant deal:

First of all, I’m not sure Samsung is really ready for the Elon Musk walking their production line 😂.

Elon also said: "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher.", on a post that said "Tesla's AI6 unifies hardware for vehicles, robots, and data centers, building on Dojo's chip design." 

And perhaps even more tellingly, he commented: "So few understand this. It will become obvious in 2 to 3 years." on an user saying this is actually the biggest news this year so far.

Here is some additional context from Q1 2024 Elon on the importance.

Tesla FSD stops at tolls and waits for the transaction to finish before automatically proceeding - like on this video.
Ashok confirms with "It can see the transaction happening using the repeater & pillar cameras. Hence FSD proceeds on its own when the transaction is complete.”

Oh, and here’s Tesla’s video of a Model 3 on FSD (Supervised) navigating the complex Swindon Magic roundabout in the UK. It’s the craziest roundabout system I’ve even seen — there are five mini-roundabouts arranged around a central island, connecting five major roads with multiple lanes and exits, with traffic flowing both clockwise and counterclockwise.

MUSKONOMY

SpaceX / Starlink

SpaceX’s updated website includes a new rocket launch dashboard with upcoming and completed missions, in additional to a live count of total completed missions, landings and reflights.

Starship moved to the launch site at Starbase for preflight testing - another launch coming in weeks!

SpaceX's Starlink now has 2 million active customers in the US, and 6 million globally.

SpaceX has announced that they will begin launching its third-generation Starlink satellites in the first half of 2026, which are expected to bring massive improvements.

xAI

xAI has begun construction on the world’s largest ceramic membrane bioreactor (MBR) to sustainably supply 13 million gallons per day of cooling water to its Colossus Supercomputer and neighboring industrial plants in Memphis, Tennessee.

Also Elon gives his thoughts to the true geeks among you:

“AI is a de facto neurotransmitter tonnage maximizer. Any AI that fails at this will not be able to afford its compute, becoming swiftly irrelevant.

What matters is that AI thinks long-term, optimizing for the future light cone of neurotransmitter tonnage, rather than just the next few years. If so, it will care about increasing the birth rate and extending humanity to the stars.

For long-term optimization, it is better to be a private than a public company, as the latter is punished for long-term optimization beyond the reward cycle of stock portfolio managers.”

The Boring Company

The Boring Company officially announced its plans to build an underground tunnel system in Nashville, Tennessee, calling it the Music City Loop.

It will connect downtown & the Convention Center to Nashville International Airport, with a travel time of around 8 minutes. They’ll start construction in fall 2025 and first part of it should be operational by spring 2026.

As before, Teslas will be used in the tunnels to transport passengers, moving thousands of people per hour with predictable transit times. Expansion possibilities include additional communities and 40+ stations following the initial route. The underground tunnels will be placed beneath state-owned roadways and will be built with zero taxpayer funds.

Las Vegas Loop has already moved more than 3M passengers, and growing.

The TBC is also hiring the founding team for Music City Loop — “looking for engineers, operations coordinators, electricians, welders and mechanics to grow our team in Nashville.” Hiring Event: Wednesday, July 30, 6:00pm - 8:00pm. boringcompany.com/applynashville

The Boring Company's Vegas Loop system recently earned a near-perfect score of 99.51% upon completing the Department of Homeland Security’s BASE assessment for safety and security, the highest score awarded for any transportation system, achieving a Gold Standard Award for excellence.

Neuralink

This dropped last week:

And now, Neuralink patient #8 and #9 have been revealed!

Patient 8: Nick Wray

“Today is day 3 of using the N1 Telepathy chip and I haven’t had this level of digital autonomy in years. The precision and speed of control out of the box has been astounding and liberating. I can’t wait to learn to play the drums again! “

If you want to read all about Nick’s story and his takes on it all, see his X account posts here.

Patient 9: Audrey Crews

She is also sharing how she wrote her name for the first time in 20 years (now with just her mind), and is sharing some of her doodles online already:

Further reading: Here’s a DailyMail article on her story.

Also on Neuralink: it has joined a study working toward a bionic eye. The goal of the study is “to address fundamental questions that will allow the development of a Smart Bionic Eye.”

Musk Foundation

Musk Foundation provided a $350,000 donation to the Boys and Girls Club of Greater Memphis to fill in federal funding gap.

xAI, which has set roots in Memphis to build up its supercomputer campuses, has also helped Memphis-Shelby County Schools with HVAC upgrades and other facilities needs.