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Only a day after Elon Musk finally confirmed that his SpaceX SPCX 0.00%↑ and Tesla TSLA 0.00%↑ companies were formally exploring a merger, Tesla’s third-quarter earnings reflected a company that is sorely in need of some new direction.
Tesla’s headline numbers were lower than last year but generally beat analysts’ estimates, though nothing in the core auto or energy business units showed much promise of surging anytime soon.
The action was in the company’s next generation products, such as its humanoid robots and its robotaxis, both of which came with the traditional Musk promises of being just around the corner, but so far are sucking up far more research spending than any reasonable public company can afford.
Tesla shares fell initially but then rallied back as investors reminded themselves that the company is now in play. They are down about 14% year-to-date but up more than 20% in the past three months on both takeover speculation and hopes — dashed by these earnings — that auto deliveries might improve.
The whole hodgepodge paints a picture of a company in transition from electric vehicle maker to new age, AI creator — but one that needs some guidance, or at least a clear mission. Combining with SpaceX will be that mission, though when Musk will pull the trigger is anybody’s guess.
Given that Tesla investors will expect some sort of premium in any mega-deal, another quarter or so of heavy R&D spending might still be in the offing, at least until SpaceX rival Anthropic goes public in the next few months. Because without the prospects of a merger hanging over the stock, shareholders would not be as forgiving of Musk as they appear to be.
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Latam climate progress at risk as Brazil goes to the polls
. . . . Climate finance flows to Latin America that have doubled in the past four years to more than $100 billion are at risk from the critical election this weekend in Brazil, where the politics over destruction of the Amazon are seen as a major battlefield for the world’s war against global warming, writes Michael Molinski. Progress in Brazil under President Luiz Inácio Lula da Silva could be derailed if right-wing candidate Flavio Bolsonaro, son of the former president, wins in a runoff on Sunday. While just one of the countries seeing flows of international investment into climate projects and deforestation efforts, Brazil is an important bellwether for Latin America. The United Nations climate summit last year in Belem, Brazil, led to a surge in climate financing for the region that, while not nearly enough, is seen as a welcome signal of global commitment to fighting climate change there.
Thursday’s subscriber insights
Britain’s Burnham blinks on North Sea drilling, hurting UK’s climate rep
. . . . Faced with higher energy prices going into the winter and a political decision with no real positive side, Britain’s Andy Burnham blinked this week, approving the restarting of drilling in the smaller of two North Sea gas fields off of Aberdeen on Scotland’s East Coast.
No doubt the Labour Party leader’s advisors told him the approval of the Jackdaw field was already cooked into his political ratings and that if his party accepted it without too much fuss then he could proceed with the approval of the more contentious Rosebank field early next year.
A political decision to be sure. But one that will hurt Britain’s carefully crafted standing among nations dedicated to reducing fossil fuel emissions and fighting climate change as global warming hits Europe hard.
The Jackdaw field, which will be developed by a venture of Royal Dutch Shell and Norway’s Equinor, won’t yield any significant results for years, and then will only deliver enough gas to heat about 6% of UK households. But it will impact Britain’s climate reputation now, just weeks ahead of the United Nations’ COP31 climate summit in Turkey.
As a consolation to environmentalists and to the climate advocates in his party and the UK’s Green party, Burnham included the establishment of a £2 billion ($2.6 billion) investment fund for renewable energy projects.
The announcement was widely accepted and was indeed applauded by President Donald Trump in the U.S. but will land with an ugly thud elsewhere. Only weeks into his term, the new PM has shown his stripes on climate, giving in to the temptation to allay job growth fears in Scotland and Northern England. Burnham’s advisors certainly expect the local political fallout from the decision to pass.
His counterparts on the global climate stage may have longer memories.
Editor’s picks: California’s new climate assessment
Watch the video: California is already experiencing the impacts of climate change. In the past decade, Californians have endured severe droughts, floods, historic wildfires, rising seas, and record temperatures all driven by climate change. Building resilience to these impacts requires sustained investment in climate change research and science. Read more about the risks and plans for resiliency in California’s fifth climate change assessment.
Latest findings: New research, studies and projects
Expansive ‘heat storms’ are a cascading climate disaster
Extensive heat waves used to be rare. But a data-driven examination of global temperatures by Reuters shows the emergence of a weather phenomenon it calls “heat storms.” “They now swarm the planet, upending life around the world from Texas to Ivory Coast to Poland,” the report says. Over the past 65 years, Reuters says, heat waves have evolved from isolated episodes to extensive, cascading weather events that can blanket large parts of the planet for months or even years at a time. “The largest heat wave of the 1960s reached about 6% of the planet as it drifted for 46 days over the Atlantic Ocean, parts of Latin America and West Africa. The largest one this decade swept across almost 85% of the globe during its 367-day lifetime, stretching into the polar latitudes and touching virtually every human being on Earth.” James Renwick, professor of physical geography at New Zealand’s Victoria University of Wellington, is quoted as saying heat storms inflict “a major disruption to global civilization. Heat is the biggest killer from climate change,” he said, noting that it can lead to “famine, hunger, death, conflict over resources.” As part of this series examining heat storms and their effects, Reuters has integrated an online Heat Storm Tracker into its regular weather coverage. With this tool, people can see what had previously gone unnoticed and, using that knowledge, tally the impact of heat storms as they rage across regions, Reuters says.
Words to live by . . . .
“All countries, especially the big emitters, must do more. Every fraction of a degree matters.” — U.N. Secretary-General Antonio Guterres, from the UN’s latest emissions gap report.