Tesla wants to go into loss again on AI spending

happy Tuesday! It’s July 21, 2026, and this is The Morning Shift – your daily roundup of the top automotive headlines from around the world, all in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

On this morning’s edition, we’re looking at Tesla’s spending and GM’s earnings estimates. We’ll also take a look at Honda’s plans for China and some new hires at Stellantis.

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Tesla, the world’s best-selling electric car maker, has decided that making and selling cars is boring. Instead it’s going to sell robots, because its CEO makes business decisions based on what feels good to him, not what anyone else thinks makes sense. Anyway, Tesla is expected to report its first quarterly loss in years as it pours money into AI. From reuters: :

July 21 (Reuters) – Tesla is expected to report its first quarterly cash loss in more than two years on Wednesday as its spending on AI and robotics increases, intensifying investors’ scrutiny of when those bets will pay off.

CEO Elon Musk has shifted the electric-vehicle maker’s focus from building cars to building so-called physical AI businesses like self-driving taxis and humanoid robots. Much of Tesla’s valuation hinges on that promise.

However, investors are growing nervous as spending on AI infrastructure, including data centers and manufacturing capacity, is projected to reach $25 billion this year, more than the quarterly cash generated by Tesla’s core automotive and energy operations.

“As capital spending more than doubled and free cash flow turned negative, investors are increasingly focused on evidence that Tesla’s spending is strengthening its physical AI moat,” Morgan Stanley analysts wrote in a note.

What does “capex” mean there? capital expendituresMoney was spent on material things like computers. It makes sense that Tesla is working hard in that area, since the software side of Musk’s AI dreams falls under xAI, which is owned by SpaceX. That company also owns Twitter, because Musk’s empire is built on the albatross that he’s convinced investors are golden geese.

Automakers estimate how much money they will make in a given year, and General Motors has raised its earnings outlook for 2026. Gas prices may be up, but it looks like people are still spending on big GM SUVs and trucks. From reuters: :

DETROIT, July 21 (Reuters) – General Motors lifted its full-year earnings outlook for the second time on Tuesday after reporting a 30% rise in second-quarter core profit due to profitable SUV and truck sales.

The Detroit automaker said it easily beat analysts’ profit estimates despite the adverse economic backdrop as consumers grappled with higher gas prices, persistent inflation and slow job growth during the quarter.

Strong gains in its home market of North America, which is also its largest, were driven by solid pricing.
GM shares rose about 1% in premarket trading.

Despite high gas prices, GM customers continue to spend on expensive pickup trucks and large SUVs like the Cadillac Escalade. The average GM vehicle in the U.S. sold for about $52,000 during the quarter, up slightly from a year earlier.

The average new car transaction price in the US is still around $50,000, so that’s how much the average GM car sells for More Compared to the average car. An interesting statistic from a company that seems very blue-collar.

The Chinese auto market has been unkind to imported brands recently, with customer preferences shifting towards domestic automakers. Honda has definitely seen a decline in sales, but it has still not lost hope in the market. From automotive news: :

SHANGHAI – Honda Motor Co renewed its China joint venture with GAC Group Co until 2038, betting on a turnaround in the world’s biggest auto market despite declining sales due to its weak electric vehicle lineup.

The move signals Honda’s determination to compete in China, even if its EVs fail to match price-competitive Chinese rivals. Honda announced the move on July 20, saying it would take better advantage of its local partner’s resources.

The move came after CEO Toshihiro Mibe told a Japanese newspaper on July 18 that his carmaker had “learned the hard way” about business in China by introducing vehicles developed from a Japanese perspective to the local market.

“The future of the automotive industry will revolve around Chinese manufacturers. Their cost competitiveness has become the industry standard,” Mibe told the Yomiuri newspaper. “The moment you avoid competing with China, it is tantamount to losing. Therefore, breaking ties with China, such joint ventures, will not be a wise move. We will take advantage of China’s strength globally.”

Honda operates in China through a joint venture, as is standard for foreign automakers in the country. Perhaps Honda is hoping its joint venture can start taking some of that home-brand cachet Is Definitely sugar based.

Stellantis has some vacancies at the helm of its most profitable brands, and those roles have now been filled. Matt VanDyke, formerly of Ford, now drives Ram. Branton Cote, formerly of Aston Martin, will drive the Jeep. From automotive news: :

Stellantis has appointed two industry veterans to lead Jeep and Ram as it expands its lineup of brands to regain lost market share.

Matt VanDyke, Ford Motor Co.’s former U.S. marketing chief, started as CEO of the emerging Ram truck brand on July 20. He succeeds Tim Kuniskis, who remains head of the company’s US brands.

Additionally, Stellantis has tapped former AutoNation and Aston Martin executive Brandon Cote as CEO of Jeep, effective August 3.

Cote replaces Bob Broderdorf, who is going on medical leave after leading the SUV brand through February 2025. Broderdorf will take on a new leadership role at Stellantis upon his return, the company said.

Good for those people. It’s good that white people can still get jobs in this economy.

I’m surprised it got an entry on History.com, but I’m not against it.

We hit the magical $4 mark again yesterday, and prices are still climbing! Well, that’s bad.

Jane Remover has three full-length albums, and I have 147 of them on my media server. I don’t know how I did it.