Good morning. Somewhere in Detroit right now, an accountant who just finished writing down several billion dollars is staring out a window, wondering where it all went. We know where it went. Keep scrolling.

Today: an L88 Corvette takes another swing at glory, America's EV bet gets a very expensive haircut, Koenigsegg builds a motor that weighs less than your carry-on, and Tesla learns that record deliveries and record profits are different sentences.

In today’s newsletter, we’ll get into

The Auction Desk: The 430-horsepower lie is back for a second lap

One Big Story: America’s EV bet gets marked to market

Engineer’s Corner: Koenigsegg built an 800hp motor the size of a large pizza

Garage Economics: Tesla’s record quarter, asterisk included

Let’s roll.

There's a 1969 Corvette L88 convertible live on Bring a Trailer right now, and it's the good kind of dishonest. Chevrolet rated the L88's 427 at 430 horsepower — deliberately underselling it so insurance companies and casual buyers would look elsewhere. Real output: closer to 560. It was a race engine sold with a license plate, and Chevy built just 116 of them for 1969, only 216 across the option's entire three-year run.

This one is Le Mans Blue over black vinyl, and the spec sheet reads like Zora Arkus-Duntov's diary: aluminum heads, 12.5:1 compression, the mandatory M22 "Rock Crusher" four-speed, a 4.56 Positraction rear, heavy-duty everything, and gloriously no radio, air conditioning, or power steering. The paperwork stack is the real flex — NCRS, Bloomington Gold, MCACN, plus two decades of stewardship under an actual NCRS and Bloomington Gold judge.

This week Cadillac — the brand that swore it would be all-electric — confirmed new gas-powered models are coming in 2027. Polestar, meanwhile, is exiting the US market entirely rather than fight the incoming ban tied to Chinese ownership. And The New York Times Magazine just published the autopsy everyone in Detroit has been dreading, asking whether the crushed American EV will take the US auto industry down with it.

The numbers behind the retreat are brutal. Between 2021 and 2024, automakers announced over $330 billion in EV and battery investments. By early 2026, the industry had absorbed at least $65 billion in losses and writedowns unwinding those same plans. Ford took $19.5 billion. GM took $6 billion as part of a $7.6 billion hit. Honda's EV losses ran to ¥267 billion (~$1.7 billion) in nine months. At January's Detroit Auto Show, the EVs quietly moved off center stage; hybrids and updated gas models moved in.

Why it matters to you:

The takeaway: The write downs aren't the end of the American EV. They're the receipt for guessing the adoption curve wrong by half a decade. The transition didn't die — it just stopped being priced for perfection. Watch November (the rare-earth truce clock is still ticking) and watch who's still spending through the trough.

Sweden's favorite mad-scientist car company has a new party trick: the Dark Matter e-motor in the Gemera. The numbers sound like a typo — 800 horsepower, 1,250 Nm of torque, from a motor that weighs 39 kg. That's roughly the mass of a five-gallon bucket of driveway sealer, producing more power than a Ferrari F40 and a Miata combined.

The secret is the geometry. Most e-motors are radial flux: the magnetic field pushes outward from the shaft, like spokes on a wheel — proven, cheap, easy to cool. Axial flux motors flip the field to run parallel to the shaft, like a stack of pancakes — shorter, lighter, more torque-dense, but harder to manufacture. Koenigsegg's patent-pending "Raxial Flux" design does both at once, harvesting force in two directions from one machine. It also runs six phases instead of the usual three — smoother torque delivery, thinner (easier-to-package) wires, and built-in redundancy: lose a phase, keep driving.

The garage translation: radial flux is your trusty half-inch drive ratchet — does everything, fits everywhere. Axial flux is the stubby wrench that only fits one spot but saves the whole job. Koenigsegg welded them together and charged accordingly.

One catch, and it's last issue's catch: this is still a permanent-magnet machine. All that density is bought with rare-earth magnets — the very supply chain the entire industry is currently sweating.

The takeaway: Hypercar tech is the industry's preview channel. Today's 39-kg flex is tomorrow's mid-size crossover motor — if the magnet math cooperates.

Tesla reported Q2 earnings Wednesday night and managed a rare double: record revenue and a profit miss ugly enough to sink the stock after hours. Revenue hit $28.24 billion, up 26%, on a record 480,126 deliveries — Tesla's best-ever second quarter and its first year-over-year delivery growth in two years. Then the other shoe: adjusted earnings of $0.33 per share versus the $0.51 expected, operating income down 57% to $398 million, operating margin at 1.4%, and free cash flow negative $1.09 billion as AI spending sent capex up 142%. Regulatory credit revenue — once a free profit faucet — collapsed to $146 million from $439 million a year ago.

For the ledger: Tesla moved a record number of cars and barely made money doing it. That's the whole US EV market in one income statement — volume is purchasable, margin is not.

And the volume crown still isn't Tesla's. BYD delivered 557,090 battery-electric vehicles in Q2, keeping the global BEV lead, and posted a record 175,349 overseas sales in June — up 95% year over year, now more than 43% of its total. BYD has been outselling Tesla in Europe for months while selling cars in China that start around $14,000. The two companies are running different races: Tesla is trying to convince Wall Street it's an AI company that happens to sell cars; BYD is just... selling cars. Everywhere.

The takeaway: The EV war's scoreboard has two columns now — units and margins — and nobody leads both. Whoever solves that equation first sets prices for everyone else.

Quick hits:

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