Tesla on Wednesday reported a "resurgence" in global demand, including a "slight increase in the United States," and the highest order volume in two years for the first quarter, UNN reports, citing Gizmodo.
Details
According to Tesla CFO Vaibhav Taneja, the sharp rise in gasoline prices after the war between Iran and the United States partly contributed to these figures.
War with Iran became the biggest threat to energy in history - IEA20.03.26, 20:10
While gasoline prices have hit most industries hard, some preliminary data indicate that the struggling American electric vehicle industry may benefit from this, as rising gasoline prices highlight the vulnerability of gasoline-powered cars in the face of geopolitical uncertainty.
As of this writing, gasoline prices remain high and are likely to stay at this level for at least some time. This week, Trump announced an indefinite ceasefire in Iran, but the decision did not open traffic through the Strait of Hormuz. Experts predict that it will take months for oil prices to normalize even after the strait is fully open.
But even with favorable gasoline prices, not everything is smooth sailing for Tesla. Because while demand is growing, it is accompanied by incredibly large capital expenditures. Tesla plans to spend over $25 billion this year. For comparison, last year the company spent about $8.5 billion, and just a quarter ago it planned to spend $20 billion in 2026.
"In 2026, we will significantly increase our investments, so we should expect a very significant increase in capital expenditures," said Tesla CEO Elon Musk. "And, obviously, Tesla is not alone in this. I think you've seen most, if not all, certainly large technology companies significantly increase their capital investments."
Indeed, the latest round of tech company earnings reports showed a stunning increase in capital expenditures across the board. The results scared investors more than they excited them, as the AI-loving market finally seemed to realize the possibility that this gigantic amount of AI investment without a clear understanding of sufficient short-term demand could be dangerous for the economy, the publication notes.
Part of Tesla's huge financial investments will undoubtedly go towards Musk's ambitious plans, which he outlined during the conference call.
Terafab
The first of these large-scale projects will be Terafab - a giant chip manufacturing plant that will be jointly built by two companies led by Musk, Tesla and SpaceX, in Texas, USA. Musk announced this initiative last month, outlining plans to produce chips for both terrestrial and space purposes, despite, as the publication writes, his lack of deep knowledge required for chip manufacturing. On Wednesday, Musk stated that the research plant would be built by Tesla, not SpaceX, and that he estimates it will cost approximately $3 billion.
Musk positions Terafab as a response to the shortage of chips needed by his own companies, but on Wednesday he made promises that seem to aim for more.
"We just expect to run into roadblocks if we don't make chips ourselves, which is why Terafab exists," Musk said during the call, adding, "I think we have some ideas about how to create, perhaps, radically better AI chips. These are kind of exploratory ideas, which means it's unlikely, but if it's unlikely, it could be a huge improvement."
Autopilot
The second incredibly ambitious promise is related to full autopilot.
Musk has promised Tesla owners fully autonomous driving without driver intervention for years, claiming it's just around the corner. But the company has certainly failed to deliver on these promises, and customers around the world are unhappy, some even suing.
Previously, Musk and his CFO made conflicting statements about whether cars would be able to achieve fully autonomous driving without driver intervention. Now Musk has finally admitted that Teslas equipped with Hardware 3 will not actually be able to achieve autonomous driving without driver intervention at all.
"Hardware 3 simply does not have the capability to achieve fully autonomous driving without driver intervention," Musk said. "We once thought it would be able to provide it, but compared to Hardware 4, it only has 1/8 of the memory bandwidth."
Instead, Musk suggested that Teslas with Hardware 3 would be offered under a "trade-in discount" and computer upgrade program.
"To do this effectively, we will have to create a kind of micro-factories or small factories in large metropolitan areas," Musk said. "If this is done only in a service center, it will be extremely slow and inefficient, so we will essentially need many production lines to make this transition."
As has been demonstrated many times, Musk is very prone to making grandiose commitments and taking on insurmountable tasks, the publication notes. Time will tell whether the Terafab project, costing about $3 billion, and Tesla's modernization micro-factories will join this long list of projects.
Not Tesla - which electric cars became bestsellers in Ukraine amid a sales surge13.04.26, 10:17