This is a terrible deal for SPCX investors. Tesla just reported another Not Good™ quarter.

Metric	                Q3 2025	Q3 2026	YoY Change
Vehicle Deliveries	497,099	486,532	-2.1%
Revenue (billions)      $28.095 $28.046 -0.2%
Operating Margin	5.8%	2.6%	-3.2 percentage points
Operating Income	$1.624B	$718M	-55.8%
Adjusted EPS (non-GAAP)	$0.50	$0.48	-4.0%

Tesla's once tech-like margins have been compressed down to typical car company margins. The earnings call and shareholder letter were the typical mix of goal setting and goal moving. This quarter they announced once again production is constrained by supply chain problems. I find it astonishing they still can't get this straightened out. Optimus is delayed yet again, from summer 2027 to Q4 2027. Optimus may be a big product one day but I am extremely skeptical that day will be any time soon. I've never seen a video of Optimus doing anything I need a robot for, for example. One problem is that LLMs were trained on enormous data sets, essentially all the writings in human history, which were available almost for free. Similar data sets for sensory inputs like touch do not exist for free, and in most cases do not exist at all and must be created which requires both time and money. I would be delighted to be wrong, but I don't see a generalized AI robot doing using useful tasks any time soon.

I believe robotaxi will be a big business, but I don't think it will be a particularly good business, simply because it is competing against the Uber/Lyft model, where the driver/owner provides services like parking, cleaning, and maintenance essentially for free. In any event, it is long way out and Tesla is clearly lagging Waymo technically and importantly is very far behind in the regulatory process. Plenty of competition on the horizon too.

Cybercab was touted as being a very low cost vehicle that could be produced in large volumes, flooding the robotaxi market. This is shaping up to be blunder. Tesla can only deploy a small number of new vehicles each week so the assembly line is mostly idle. It will take them years before it is running at full capacity. They could have rolled out their robotaxi business using the Model Y at a fraction of the cost. Their previous vehicle, the Cybertruck as also a blunder. The only new planned vehicle that I'm aware of is the Roadster, which is at least a year out with features and pricing still to be determined.

In the meantime, Tesla has a P/E of 446 and PEG of 10. By those metrics, Tesla is wildly overvalued. SpaceX paying a premium for Tesla makes no financial sense. SpaceX itself has a P/S of about 60. That's an eye-popping valuation just by itself. But can kind of make the business case for SpaceX if you wave your hands hard enough. Big head start in the launch business, great growth and margins on Starlink, etc. But yowsa, it ain't cheap. Bolting Tesla on top of that...I don't know about that one.