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The poll results are in (from last week’s edition) and it’s clear what you want: Analysis with a capital A. You also want scoops, a bit of a news roundup, and deals, but far and away you’re looking for analysis. I’ve always sprinkled my thoughts and insights throughout the newsletter, but over the next few weeks and months you’ll see me push further into analysis.
On that note, earnings season is upon us and two stood out to me: GM and Tesla. Both companies are facing pressure from tariffs. And while GM also sells gas-powered vehicles, both are trying to sell EVs in a market that has seen growth slow while facing a future without EV incentives.
How GM and Tesla plan to navigate this (or at least what they’re signaling) is quite different.
GM, which saw tariffs take a $1 billion bite out of its Q2 line, still sees EVs as its “north star.” And while GM certainly trails Tesla in EV sales today, it has a bigger mix of EV models to attract customers — more than a dozen in all. And Chevrolet is now the No. 2 EV brand in the U.S.
And while GM did tout $4 billion of deferred revenue from its advanced driver-assistance system Super Cruise, along with OnStar and other software services that will be recognized over time, the big theme of the call was “flexibility.”
Chair and CEO Mary Barra and CFO Paul Jacobson said the word “flexibility” nine times during the Q2 earnings call. What they mean by flexibility is setting up factories where they can easily assemble EVs and ICE vehicles — and change up the mix based on demand.
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Meanwhile, Tesla is betting heavily on the “future,” and for CEO Elon Musk that means autonomy and AI, or as he sometimes calls it, “real-world AI.”
The vast majority (about 74%) of Tesla’s revenue still comes from selling cars, although Q2 results show a 16% year-over-year decline in automotive revenue. But if you listened to the Q2 call, it’s clear that Elon Musk isn’t interested in Tesla being a car company. (He even admitted that the highly anticipated breakthrough cheaper model Tesla is working on is really just a stripped down version of the Model Y.)
Musk wants to make and sell Optimus robots and deploy autonomous vehicles. The problem is that today these products — or future products — are not generating profits, let alone revenue.
Yes, Tesla does bring in revenue from its advanced driver-assistance system known as supervised Full Self-Driving. (This is not an autonomous vehicle and requires human driver engagement.) And yes, the company is charging for robotaxi rides in South Austin, but it is not at scale, nor is it profitable.
Musk acknowledged there would be some rough quarters ahead, but he still believes that ultimately this will be where the bulk of Tesla profits come from.
I think that this transition is going to take far longer than Musk has publicly shared. (Just today, The Information reported the company is far behind on its Optimus robot production goal.) And it seems the company is feeling the pressure to act. For instance, Tesla is reportedly bringing a limited version of its robotaxi service to San Francisco this weekend even though it technically doesn’t have the required permits. (What do you think Tesla’s workaround will be?)
Meanwhile, Tesla is under regulatory and legal pressures that could further undermine its effort to reboot sales and even threaten his future plans around FSD.
A little bird
Got a tip for us? Email Kirsten Korosec at [email protected] or my Signal at kkorosec.07, Sean O’Kane at [email protected], or Rebecca Bellan at [email protected].
Deals!
Just a smattering of deals this week!
Bosch Ventures led a $21 million Series B investment in 4screen, a Munich-based company that connects automakers, brands, and drivers through native vehicle displays.
Blockskye, a corporate travel infrastructure company, raised $15.8 million in a round led by Blockchange. United Airlines Ventures, Lightspeed Faction, Lasagna, Litquidity Ventures, Longbrook Ventures, KSV Global, and TFJ Capital also participated.
Startup Glīd Technologies raised $3.1 million in a pre-seed funding round led by Outlander VC, with participation from Draper U Ventures, Antler, The Veteran Fund, M1C, and angel investors.
Los Angeles-based Nevoya came out of stealth last year with the ambitious goal of breaking the EV truck adoption logjam. Nevoya made enough progress on its goal to attract investors — and a $9.3 million seed round led by Lowercarbon. Floating Point and LMNT Ventures also joined, along with existing investors Third Sphere, Stepchange, and Never Lift. Qasar Younis, the founder and CEO of buzzy self-driving AI company Applied Intuition, also invested.
Rune Technologies, a startup that wants to tackle AI-enabled software for military logistics, raised a $24 million Series A round led by Human Capital with participation from Pax VC, Washington Harbour Partners, a16z, Point72 Ventures, XYZ Venture Capital, and Forward Deployed VC.
Swift Navigation, which has developed centimeter-accurate positioning for vehicle autonomy, robotics, and logistics, raised $50 million in a Series E financing round led by Crosslink Capital. Existing investors NEA, Eclipse Ventures, EPIQ Capital Group, First Round Capital, TELUS Global Ventures, and Potentum Partners, along with new investors Niterra Ventures, AlTi Tiedemann Global, GRIDS Capital, Essentia Ventures, Shea Ventures, and EnerTech Capital also participated.
Notable reads and other tidbits
Autonomous vehicles
Lyft will add autonomous shuttles made by Austrian manufacturer Benteler Group to its network in late 2026. The shuttles will be deployed in partnership with U.S. cities and airports.
Electric vehicles
Lucid Air owners will be able to charge their luxury EVs at thousands of Tesla Supercharger stations in North America starting July 31, nearly two years since the automakers reached an agreement. But there is a notable caveat: Lucid Air vehicles won’t be able to charge as fast as Tesla vehicles.
Gig economy
Uber is bringing its women preferences feature, which lets female drivers and riders match with each other, to the United States. The feature will first roll out in Detroit, Los Angeles, and San Francisco.
Last but not least
One more note on Tesla. By the time this newsletter reaches your inbox, we won’t have an answer, but an important Department General Services hearing has been held all week in California. At stake: Tesla’s ability to sell cars in California.
The TL;DR: The California Department of Motor Vehicles is arguing that Tesla should lose its license to sell vehicles in the state over false advertising claims on its branded Autopilot and Full Self-Driving advanced driver-assistance systems.
