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While Tesla shareholders are focused on giving Elon Musk a huge CEO compensation package, there’s a potentially even more impactful proposal that is sneaking through: Tesla investing in Musk’s xAI.

Here are the pros and cons of this controversial proposal.

Tesla Shareholder Proposal to invest in xAI

For those unaware, xAI is Elon Musk’s private AI startup behind the large language model (LLM) and generative AI Grok.

The company now also includes X, formerly Twitter, after Musk orchestrated a merger between the two companies earlier this year.

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xAI’s origin is fascinating and comes from Musk’s long-standing obsession with controlling AI.

I published a detailed timeline of Musk’s attempt to gain control of AI in a report based on emails and text messages released through lawsuits between Musk and OpenAI earlier this year:

In short, Musk tried to gain complete control of OpenAI, but he failed. He moved his AI effort to Tesla, but he then lost control after selling too many shares to acquire Twitter. So he moved his AI effort to a new private company xAI.

Tesla shareholders are now suing the billionaire for breach of fiduciary duty for starting xAI, which competes for talent with Tesla.

Many experts believe shareholders have a strong case, as Musk cited a “conflict of interest” with Tesla’s own AI effort when leaving OpenAI. The CEO even threatened Tesla shareholders not to build AI products at the company if he didn’t gain more control through a higher percentage of Tesla’s shares.

Shareholders are requesting that Musk transfer his ownership of xAI to Tesla.

However, the case will take a long time to go through the court system. Meanwhile, other Tesla shareholders are suggesting that Tesla use its own money to invest in xAI directly.

They submitted a proposal that is up to a vote at Tesla’s upcoming shareholders meeting on November 6th:

RESOLVED, that shareholders of Tesla, Inc. (the “Company”) request that the Board of Directors authorize an investment in xAI, in an amount and form deemed appropriate by the Board.

WHEREAS, an investment in xAI would provide Tesla with a stake in a major AI player, potentially yielding significant financial returns while fostering technological advancements that benefit Tesla’s customers and shareholders.

As you can see, the proposal leaves it to the board to decide the full amount to invest into Musk’s private company.

Interestingly, this is the only shareholder proposal on which the board hasn’t taken a position. It is asking shareholders to vote against all other proposals, even one that is pushing for an audit to avoid contributing to child labor.

The lack of a vote recommendation from the board, which is seen as being under Musk’s control, is widely interpreted as a recommendation to vote for it. However, Musk and the board must abstain due to the ongoing lawsuit regarding xAI.

Does it make sense for Tesla to invest in xAI?

The Good

Obviously, it’s an investment and you want to get a return on it. The main “good thing” to come out of this is if xAI somehow manages to beat all the other extremely well-funded and well-staffed competition into creating a real general AI.

Considering xAI is significantly behind the competition in most revenue-generating AI-backed products and it is reportedly valued at more than $200 billion, Tesla is arriving late to the company, and realistically, it would only achieve a significant return on investment through AGI.

The only other potential benefit would be technology sharing, but an investment doesn’t actually help that much there.

Most other automakers have already partnered with AI companies to integrate LLMs in their vehicles. Tesla has already done so with Grok before investing in xAI.

In short, any technology partnership can be done without an investment in the company, as they have already shown.

If anything, it would create another circular economy, which is all the rage in the AI world these days.

The Bad

It’s obviously a risky investment, and Tesla would be entering at an already substantial valuation of approximately $200 billion – or even more, depending on when the round closes.

In comparison, OpenAI is reportedly valued at $500 billion, and it is estimated to have 700-800 million weekly users.

Meanwhile, xAI’s is estimated to have ~30 million weekly users.

As stated in the “good”, xAI has little chance of catching up to the competition in terms of revenue-generating AI services unless it can bypass them all through AGI, which is a massive gamble.

Due to its heavy investment in computing power, xAI is believed to have a burn rate of roughly $10 billion per year.

AI companies are also amortizing their compute at different rates, and many analysts worry that some are overestimating the lifespan of those chips.

Most of the $14 billion xAI raised in its first 2 years was reportedly gone by early 2025, and the company is now rumored to be closing a new round of financing between $10-20 billion. With the current burn rate, xAI is going to have to repeat this level of funding every year for the foreseeable future.

SpaceX is rumored to be investing about $2 billion in xAI’s current financing round.

With Tesla’s own profits shrinking over the last three years, it is not in a position to sustain such a high burn rate with $2 billion in investments every year.

At its current earnings rate, most of its early earnings would go into xAI with a similar investment as SpaceX.

The Ugly

The most remarkable aspect of this situation is that the Tesla shareholders suing Musk and the board over the funding of xAI have a compelling case.

There’s a real chance that Tesla could end up owning xAI without even having to invest in it, as the chief executives of public companies are not allowed to create competing private companies and funnel resources between them, which is exactly what Musk did.

Prior to starting xAI, Musk himself said that Tesla was an “AI” company. Instead of doing the right thing and incorporating the xAI effort into Tesla, he decided to do it privately because he wasted a large percentage of his Tesla ownership on buying an inflated Twitter.

Speaking of Twitter, Tesla would literally be investing in an again-inflated Twitter.

Musk sold tens of billions of dollars worth of Tesla shares to buy Twitter at $44 billion valuation, which he himself admitted was inflated.

Private investors wrote off most of the valuation over the next 3 years. As of late 2024, it was reportedly worth only $9 billion, but then Musk, a master of self-dealing, had xAI buy it/merge with it, magically raising its valuation back to $44 billion.

This also contributes to inflating any investment in xAI.

Finally, and perhaps the most troubling aspect of this whole thing, Tesla, which has as its mission to accelerate the world’s transition to renewable energy, would be investing in a company that currently primarily produces AI slop that consumes a ton of energy for questionable uses, including an extremely controversial AI companion program.

In short, Elon Musk is double-dipping into Tesla to keep his obsession with controlling AI alive.

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Tesla relaunches Model S/X in Europe after a 3-month break

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Tesla relaunches Model S/X in Europe after a 3-month break

Tesla has relaunched Model S and Model X in Europe after a 3-month break in taking orders for its two flagship vehicles on the old continent.

In June, Tesla unveiled another minor refresh of the Model S and Model X.

Considering Tesla fumbled the rollout of the previous refresh in Europe, with significantly delayed deliveries, the automaker addressed the issue this time by stopping to take orders for the Model S and Model X in Europe starting in July.

Today, Tesla reopened orders for new Model S and Model X vehicles in European markets.

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In France, the Model S starts at 109,990 € while the Model X starts at 114,990 €.

Tesla is quoting a start of deliveries in November.

Here are Tesla’s listed changes to the Model S and Model X with this mild update:

  • Up to 744 km of range (Model S Long Range)
  • Even quieter inside
  • New wheel designs + exterior styling
  • Front fascia camera for better visibility
  • Dynamic ambient lighting all around the interior
  • Smoother ride thanks to new bushings & suspension design
  • Adaptive driving beams
  • More space for 3rd row occupants & cargo in Model X

While being Tesla’s flagship vehicles, the programs have been somewhat neglected over the last 5 years, and sales have been in a steady decline.

The automaker even stopped making the vehicles for RHD markets.

Electrek’s Take

Nice to see Tesla learning from its mistakes.

For those who don’t remember, the rollout of the previous refresh was terrible. Tesla took orders for almost a year, but it waited for almost another year to start deliveries due to problems ramping up production.

Now, it appears that deliveries in Europe will occur within 6 months of the refresh and within weeks of ordering for most people.

That said, the mid-cycle refresh has been considered mild and isn’t likely to have a significant impact on sales.

I wouldn’t expect more than a few thousand Model S/X sales in Europe per year.

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‘Uber Green’ shifts to ‘Uber Electric,’ and is offering (some) drivers $4k to switch to an EV

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'Uber Green' shifts to 'Uber Electric,' and is offering (some) drivers k to switch to an EV

Uber gets it. The rideshare behemoth has observed the upward trend of EV adoption across its database of customers and drivers and is helping to support that transition. Beginning today, the “Uber Green” ride option is now called “Uber Electric,” visible to all app users worldwide. To celebrate the transition, Uber is offering discounted rides for those opting for electric vehicles, and drivers may also qualify for a $4,000 grant.

At this point, Uber is a household name in the rideshare and logistics industries. Hell, it’s even a verb at this point. You don’t get this far without innovation and foresight, something the $200 billion company has excelled at to constantly evolve and adapt.

I recall when Uber initially offered only black town cars. Now you can order an UberX, Uber XL, Uber Comfort, Uber Eats, Uber Pet, rent a car, order groceries… the list goes on. In terms of electric vehicle adoption, Uber has long shown interest in the technology and quickly understood that EVs are ideal for the gig economy that comprises its market.

We’ve seen Uber partner with several autonomous vehicle developers, many of which operate fleets of electric vehicles. In fact, we’ve covered so many partnerships between Uber and other exciting mobility companies that we can’t begin to name all of them.

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At one point, Uber was even developing a dedicated rideshare EV with defunct UK startup Arrival. The list goes on.

Today, Uber has recognized the dwindling incentives available to US drivers interested in going electric and has tweaked its rideshare offerings to promote more sustainable options.

Uber Electric
Source: Uber

Uber Green goes full-electric worldwide today

According to an email sent from Uber this morning, Uber Green has been renamed Uber Electric. Per the company, the new name “reflects record EV growth on our platform, making it easier for riders to choose zero-emissions rides.”

Uber elaborated that over 200,000 EVs are driving on its global network, and 1 in 4 of its customers say their first-ever EV ride was through the Uber app (I hope it wasn’t in the back seat of a Model Y, because that’s a rough ride).

Today’s transition builds upon Uber’s decision to make Uber Green (a mix of hybrids and EVs) fully electric in the US earlier this year. Those parameters now apply to the entire rideshare network. Pradeep Parameswaran, Global Head of Mobility at Uber, spoke:

Uber Electric is more than a new name, it represents the real progress we’ve made toward electrifying our platform globally over the past five years. Thousands of drivers are leading the charge, choosing electric and helping cities improve air quality. We’ll keep supporting drivers by removing barriers to EV adoption and working with cities to improve access to charging.

To celebrate the transition to Uber Electric, the company is offering customers 20% off (up to $8) their next EV ride when they use promo code GOELECTRIC20 (valid for 7 days).

Additionally, Uber has recognized the expired federal grant of $4,000 for used EV purchases in the US and is keeping that incentive alive in certain states to entice drivers to continue to go fully-electric. The company’s “Go Electric” grants will offer eligible Uber drivers up to $4,000 toward new and used electric vehicle purchases, but only in the following regions:

  • California
  • Colorado
  • Massachussetts
  • New York City

Uber’s grant can be combined with other individual state incentives, making it easier than ever for drivers to go electric, depending on their state. Uber pointed out that US drivers nationwide can still receive $1,000 toward any new or used EV purchased through TrueCar. 

Go electric! Opt for the EV option on your next ride and use that discount code!

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Tesla recalls recent Model 3 and Model Y over battery pack defect

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Tesla recalls recent Model 3 and Model Y over battery pack defect

Tesla is recalling approximately 13,000 recent Model 3 and Model Y vehicles built earlier this year due to a battery pack defect that can result in power loss.

In August, Tesla started getting reports of power losses in new Model 3 and Model Y vehicles.

After reviewing 36 warranty claims and 26 field reports, the automaker identified a defect in some battery pack contactors that could potentially affect approximately 8,000 Model Ys and 5,000 Model 3s built in the US between March and August 2025.

Tesla wrote in the recall notice:

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The recall population includes certain Model Year (“MY”) 2025 Model 3 vehicles manufactured between March 8, 2025, and August 12, 2025, and MY 2026 Model Y vehicles manufactured between March 15, 2025, and August 15, 2025, that are equipped with a battery pack contactor manufactured with InTiCa solenoid.

If the battery pack contactor opens when the vehicle is in drive, it loses power and ability to apply torque, which may increase the risk of a collision – hence the safety recall.

The automaker identified Sistemas Mecatrónicos InTiCa S.A.P.I., a tier 2 supplier in Mexico, and SongChuan, a tier 1 supplier in Taiwan, as being involved in the recall.

Tesla confirmed that it is contacting all potentially affected owners and it will replace the affected contactor with “a certified contactor that does not contain InTica solenoid and that maintains coil termination connection” at no cost to owners.

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