Elon Musk had a distinct note of concern about the current economic climate, particularly the high-interest rate environment, during the 2023 third-quarter earnings call.
Tesla's earnings dropped by 37% from a year earlier, marking the smallest profit in two years. The company's third-quarter revenue saw a 9% boost from the previous year. However, Tesla fell short of Wall Street expectations on both fronts.
The company's profit margins have also slimmed. Its gross margin stood at 17.9%, a seven percentage point dip from a year ago. The adjusted automotive margin, a metric closely watched by industry experts, fell by nearly 11 percentage points to about 18%.
Interest Rates and Car Affordability
Musk began by highlighting that buying a car boils down to the monthly payment for most people. "The vast majority of people buying a car is about the monthly payment... as interest rates rise, the proportion of that monthly payment that is interest increases naturally," Musk stressed.
With rising interest rates, a larger portion of the monthly payment goes toward interest, making it difficult for many to afford the car. He stresses, "If interest rates keep rising, you just fundamentally reduce affordability."
This is a particular concern for Tesla, as they are tracking for the Model Y to be the best-selling car globally, not just in revenue but unit volume. Musk explains that high-interest rates can reduce the affordability of their vehicles, likening rising interest rates to an increase in the car's price.
Listen to Replay of the Earnings Call
Historical Lessons from 2009
Musk's concerns are not unfounded. He vividly recalls 2009 when General Motors and Chrysler filed for bankruptcy. Musk recounts Tesla's close brush with the financial crisis, detailing how they closed a financing round on Christmas Eve, without which they would have failed to meet payroll just two days after Christmas. The memory serves as a poignant reminder for Musk, who emphasizes, "I don't want to be going at top speed into uncertainty."
Despite the looming economic concerns, Tesla has growth opportunities. Giga Texas still has ample space to expand production, pointing out that they are "only occupying a tiny corner of the land that we have." However, Musk noted that one of their major challenges is personnel, as the greater Austin area has a limited population, which is further constrained by a housing crisis.
The Importance of Car Price
Musk touched upon price elasticity, comparing Tesla vehicles to other cars like the RAV4. He emphasized the importance of making Tesla vehicles more affordable for the majority, iterating, "Cost is not an optional thing for most people; it is a necessary thing." He further explained that due to rising interest rates, even though Tesla has reduced the prices of vehicles like the Model Y, the monthly payment for customers remains almost the same due to the increased interest component.
The Wider Banking and Credit Situation
Musk also dived into a more significant credit situation. He pointed out that acquiring credit has become a challenge for many. Many banks have become more cautious, and some, like Credit Suisse, have even collapsed, which was an unexpected shock for many. He added, "People are reading about wars all over the world. Buying a new car tends not to be front of mind.
Elon Musk's concerns mirror the more considerable anxieties surrounding the global economy. The call served as a reminder that even industry giants like Tesla are not immune to global economic shifts and uncertainties.
Tesla recently launched software update 2025.8.3, which included a bunch of “minor updates.” Nestled away in the release notes are a couple of interesting features - including some major changes to the Energy App.
We’re not quite sure we’d call these minor updates, so let’s take a bit of an exploration of the revitalized Energy App.
The Energy App has received some new categorization features in the Consumption tab. You can once again limit the graph by distance. As part of the 2024 Holiday Update, Tesla redesigned the consumption tab and brought it to the new Model S and Model X for the first time. However, with the redesign, Tesla removed the ability to choose the distance shown in the graph, instead providing a static display of the last 200 miles (300km).
The first part of the improved Energy App is bringing back this distance filter. You can now choose between showing the last 10, 100, or 200 miles (15, 150, or 300 km). This differs from the previous available distances of 5, 15 and 30 miles, but brings back the ability for the driver to choose a distance that may be more applicable to how they’re driving.
We’d love for Tesla to introduce custom distances by pinching and zooming the graph or simply add the ability to choose “This Drive Only” to the list of available distances.
Reset Energy App History
@EV3_Model3 on X
Sadly, the “Instant Range” button that was available in the Energy App before is still not available, but Tesla introduced a new feature that may be even better. You can now clear your driving history so that the graph only reflects your current driving style.
This is a little hidden, but if you tap the little info icon at the top near your average Wh/mi, you’ll now be presented with a dialog that lets you clear your history.
This could be useful if you’ve just come from some hard driving on a track or off-road, where energy consumption could be exaggerated. It could also be useful if you just started towing or a different type of driving that is drastically different from your current driving.
Other Changes
In addition, it looks like future predictions of the Energy app now take into account your driving history and apply that in addition to expected vehicle consumption, weather, altitude, and the multitude of other factors that your Tesla constantly takes into account while calculating your expected range.
While these are smaller improvements to the Energy app, they added some important functionality, as it helps users better understand their vehicle consumption and display data that is more applicable to the current driving style.
This is a great example of Tesla listening to its customers and bringing back features they had previously been removed. Check out the video below by akide on the updated Energy app in update 2025.8.3.
Sandy Munro once again had the opportunity to chat (video below) with Lars Moravy, Tesla’s Vice President of Vehicle Engineering, as well as Franz Von Holzhausen, Tesla’s Chief of Vehicle Design. This time, rather than focusing on the improvements to the refreshed Model Y and all the new engineering behind it, the focus was on Tesla’s autonomous ambitions.
In this case, the Cybercab and Robovan were the key highlights, with a distinct focus on the Cybercab. With that all said, let’s dig into all the fun new stuff. You can check out the entire video at the end of the article.
Cybercab Unboxed Process
The Cybercab will be the first of Tesla’s vehicles to use their new unboxed assembly process, which builds vehicles in parallel sections, and then brings them together all at once for final assembly. Traditionally, vehicles are assembled from the ground up, and sometimes even disassembled for parts of production to take place.
This innovative method involves using a big rear and front casting, brought together by a structural battery pack on the floor. The door rings are hot-stamped and laser-welded to form the side shell of the Cybercab, resulting in a very rigid structure that can also absorb crash impacts due to its unique manufacturing.
Paint-Free Panels
We’ve already talked about the Cybercab’s unique paint-free panels, but we’ve never heard until now exactly how Tesla intends to manufacture them. Tesla will inject colored PU plastic onto the backside of another plastic part (formed from various processes) and then ultrasonically weld that entire piece to an inner part.
That essentially combines multiple parts into one smooth piece that is easy to repair - because all you have to do is remove the entire panel - it just comes off as the interior fasteners are removed. There is no subframe holding it together - instead, the subframe is part of the panel.
The only area of the vehicle that will have any paint will be the hot-stamped door rings - which will be painted to improve corrosion resistance to protect the steel.
Aerodynamics
Aerodynamically, the Cybercab boasts the largest aero-cover-to-wheel ratio of any Tesla vehicle. This updated aero cover improves efficiency, even with the Cybercab’s relatively large tires—chosen to reduce rolling resistance. Interestingly, the impact of unsprung weight on efficiency is minimal compared to the benefits of improved rolling resistance and aerodynamics.
Another key to the aerodynamics is the teardrop shape of the Cybercab itself. With its low profile and smooth shape, it is extremely aerodynamically efficient. While neither Sandy nor Lars delved into drag coefficients, we expect it will likely be more efficient than the Model 3’s already fantastic Cd of 0.219.
Range and Battery Pack
Tesla currently has prototypes undergoing real-world testing at Giga Texas to evaluate range and efficiency. The goal is to ensure the vehicle can operate throughout an entire day in the city before returning to charge.
Tesla is targeting a battery pack under 50kWh, delivering close to 300 miles of real-world range—an impressive efficiency of around 166Wh/mi, even outperforming the Model 3’s lowest at 181Wh/mi.
When Does It Arrive?
So, with all that new knowledge - when does the Cybercab arrive? Well - the prototypes for the June Robotaxi network deployment in Austin are getting prepared now - but Tesla expects to begin production and sales sometime in the first half of 2026.
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