Elon Musk during a news conference with President Donald Trump on May 30, 2025, inside the Oval Office (Tom Brenner/Getty Images)

black eye

Tesla’s sales are down 30% in China, and it’s not because of Elon Musk

Tesla’s problems in China have more to do with competition than controversy surrounding Musk.

Rani Molla

6/9/25 12:08PM

Tesla’s sales in China were down 30% to 38,588 vehicles in May compared with the same month a year earlier, according to new data from China Passenger Car Association reported by China EV blog CnEVPost. Out of the five months reported this year, four saw year-on-year declines. From January through May, Tesla sales were down about 8% in China compared with the same period in 2024. Analysts expect sales in China to decline for the full year, which would be its first year-over-year decline there.

As JPMorgan analyst Ryan Brinkman said on a webinar about the state of the auto industry late last month, CEO Elon Musk isn’t facing the same level of political blowback in China as he is in the US and Europe.

“We know [sales are] down in North America, we know they’re down in Europe because he’s upset half the population in the US and 95% of the population in Europe,” Brinkman said. “Musk remains a popular person in China.”

Rather, the company’s problems in China have more to do with competition from rivals like BYD.

“They’re down in China because the competition is ferocious,” Brinkman said. “They’re competing on price, but they’re also competing on design and technology and refresh rates because they’re coming out with new models every two years, whereas Tesla has never introduced a new model in China.”

Brinkman added that autonomous driving is table stakes in China: “They’re giving away autonomy for free.”

However, even without Musk’s political machinations it’s possible Tesla is facing a political branding problem in China, too.

As an independent analyst who goes by Troy Teslike recently wrote, Tesla, like all American brands in China, is facing “political tensions following U.S. Vice President JD Vance’s remarks, which many in China saw as disrespectful.” In April, Vance went on Fox News to talk about tariffs and said, “We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture.”

Rani Molla10h

Anthropic’s scramble for compute now includes rival xAI

Another day, another major partnership with an AI rival. This time, Anthropic signed a deal with SpaceX’s xAI to access compute from its Colossus 1 data center to help it improve capacity for its Claude Pro and Claude Max subscribers. Just yesterday, The Information reported that Anthropic planned to spend $200 billion on Google Cloud services over the next five years. As Sherwood News’ Luke Kawa wrote:

“Anthropic has been a victim of its own success: the popularity of Claude Code and Cowork have revealed compute constraints and left users frustrated by caps. In response, the Claude developer has embarked upon a mad scramble for compute, striking or expanding deals with CoreWeave, Amazon, Google, and Broadcom.”

Now, it’s adding xAI to the list — even as the Elon Musk company builds a competing model.

In less terrestrial news, xAI said that as part of the agreement, Anthropic “expressed interest in partnering to develop multiple gigawatts of orbital AI compute capacity.”

xAI — Creators of Grok, the AI Chatbot

“Anthropic has been a victim of its own success: the popularity of Claude Code and Cowork have revealed compute constraints and left users frustrated by caps. In response, the Claude developer has embarked upon a mad scramble for compute, striking or expanding deals with CoreWeave, Amazon, Google, and Broadcom.”

Now, it’s adding xAI to the list — even as the Elon Musk company builds a competing model.

In less terrestrial news, xAI said that as part of the agreement, Anthropic “expressed interest in partnering to develop multiple gigawatts of orbital AI compute capacity.”

11h

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Rani Molla13h

SpaceX and Tesla’s Terafab could cost $119 billion — far more than expected

The initial phase of SpaceX and Tesla’s joint chip production effort, called Terafab, could cost $55 billion, with additional phases adding up to $119 billion in capital investment, Reuters reports, citing a notice posted on a Texas county website. Ultimately the goal of Terafab is to build enough in-house AI chip capacity to supply both companies.

The price tag is also higher than expected. Morgan Stanley had previously estimated Terafab would cost $34 billion to $45 billion.

Fortunately for Tesla, whose capex is expected to skyrocket this year, much of the early spending will sit on SpaceX’s balance sheet.

Here’s Musk on the last earnings call:

“SpaceX is going to take care of like the initial phase of the scaled up Terafab... Any kind of intercompany thing has to be approved by both the SpaceX and Tesla board of directors. It’s got to go through a conflict resolution. It’s going to have, unfortunately, a lot of complexity because we’ve got to make sure Tesla shareholders are served and SpaceX shareholders are served, and strike the right balance there.”

SpaceX files plan for $55 billion Terafab chip facility in Texas

The price tag is also higher than expected. Morgan Stanley had previously estimated Terafab would cost $34 billion to $45 billion.

Fortunately for Tesla, whose capex is expected to skyrocket this year, much of the early spending will sit on SpaceX’s balance sheet.

Here’s Musk on the last earnings call:

“SpaceX is going to take care of like the initial phase of the scaled up Terafab... Any kind of intercompany thing has to be approved by both the SpaceX and Tesla board of directors. It’s got to go through a conflict resolution. It’s going to have, unfortunately, a lot of complexity because we’ve got to make sure Tesla shareholders are served and SpaceX shareholders are served, and strike the right balance there.”

Rani Molla5/5/26

Apple to let users choose between Anthropic, Google, and OpenAI models

Apple has been inching toward letting outside AI power its devices — and now it’s going further.

The company plans to let users choose between rival AI models across iOS 27, due this fall, expanding beyond ChatGPT to include players like Google and Anthropic, Bloomberg reports. The difference this time: deeper integration, with outside models powering features like Siri, writing tools, and image generation across the system.

Currently, Apple’s voice assistant, Siri, gives users the ability to query ChatGPT, but doing so requires a clunky extra step and usage has been poor. Meanwhile, Apple’s own AI tools have fallen short. (Apple has decided to use Google’s Gemini to power Siri in the future.) It’s not clear users care which AI is under the hood — as long as it works.

Apple to Let Users Choose Rival AI Models Across Its iOS 27 Features

Rani Molla5/5/26

FactSet and S&P Global fall after Anthropic releases financial services agents

FactSet and S&P Global are trading lower after Anthropic unveiled a set of AI agents meant to automate financial services work. Both stocks also sold off earlier this year after Anthropic’s Claude introduced financial research tools.

The 10 agents handle tasks like earnings analysis, market research, financial modeling, and auditing — tasks that mirror how analysts use FactSet and S&P Global’s data and research platforms.