Elon Musk is on a mission to build new supercomputers. As the CEO of Tesla and his new artificial intelligence startup xAI, the tech titan has big plans for how artificial intelligence can help to supercharge his businesses.

In January, he wrote on X that Tesla should be viewed as an AI/robotics company rather than a car company. Tesla’s custom-built supercomputer named Dojo is key to this transformation. Tesla has said it plans to spend $500 million to build the supercomputer in Buffalo, New York. Tesla is also building another supercomputer cluster, called Cortex, at the company’s headquarters in Austin, Texas.

Dojo will process and train AI models using the large amounts of video and data captured by Tesla cars. The goal is to improve Tesla’s suite of driver assistance features, which the company calls Autopilot, and its more robust Full Self-Driving or FSD system. Subscriptions to Tesla’s FSD features cost $99 a month and include automatic lane changes, automatic parking and automatic stopping for traffic lights and stop signs.

“They’ve sold what is it, 5 million plus cars. Each one of those cars typically has eight cameras plus in it. And if you think then that those cars are driving around, let’s just say 10,000 miles a year on average, they’re streaming all of that video back to Tesla,” says Steven Dickens, chief technology advisor at the Futurum Group. “So what can they do with that training set? Obviously they can develop Full Self-Driving and they’re getting close to that.”

Despite their names, neither Autopilot nor FSD make Tesla vehicles autonomous and require active driver supervision, as Tesla states on its website. In the past, the company has garnered scrutiny from regulators who say that Tesla falsely advertised the capabilities of its Autopilot and FSD systems. But reaching full autonomy is critical for Tesla, whose sky-high valuation is largely dependent on bringing robotaxis to market, some analysts say.

The company reported lackluster results in its latest earnings report and has fallen behind other automakers working on autonomous vehicle technology. These include Alphabet-owned Waymo, which is already commercially operating fully autonomous taxis in several U.S. cities, GM’s Cruise and Amazon’s Zoox. In China, competitors include Didi and Baidu.

Tesla hopes Dojo, which Musk says has been running tasks for Tesla since 2023, will change that. A Tesla robotaxi event originally scheduled for August is now expected to occur in early October.

Dojo can also be useful for training Tesla’s humanoid robot, Optimus, which the company plans to use in its factories starting next year. Musk has said that Tesla plans to spend $10 billion this year on AI.

Musk is also betting on supercomputers to run his new AI venture xAI. Musk launched xAI in 2023 to develop large language models and AI products, like its chatbot Grok, as an alternative to AI tools created by OpenAI, Microsoft and Google.

Despite being one of its founders, Elon Musk left OpenAI in 2018 and has since become one of the company’s harshest critics. In June, it was announced that xAI would build a supercomputer in Memphis, Tennessee to train Grok. In early September, Musk revealed that a portion of the Memphis supercomputer, called Colossus, was already online.

To learn more about Elon Musk’s supercomputer plans, watch the video.

Chinese electric vehicles will remain competitive in Europe despite the EU’s additional tariffs on autos made in the country, particularly after they were revised lower last month.

In the latest tariff revisions at end August, BYD, China’s behemoth automaker, saw tariffs cut to 17% from 17.4%, Geely to 19.3% from 19.9%, and SAIC saw a reduction to 36.3% from 37.6%.

To make the European market unattractive for Chinese EV exporters, tariffs have to be as high as 50%, according to research group Rhodium. It said that number might need to be even higher for vertically integrated manufacturers such as BYD.

The current tariffs will not be a significant deterrent to China’s EV-makers, said Joseph McCabe, president and CEO of global auto research company AutoForecast Solutions. “Tariffs on Chinese-made EVs will create a hurdle, but not a barrier to entry,” he added.

He pointed out that the EU’s tariffs were not as severe as those announced by North America because European and Chinese original equipment manufacturers are heavily interconnected. The U.S. announced a 100% tariff on Chinese EVs in May this year. Canada followed suit last month.

“It is a delicate balance to promote domestic European production without severely impacting their Chinese operations,” McCabe said.

Chinese EV makers are coming up with newer, cheaper offerings even as the EU strives to curtail imports via tariffs.

At a conference in May this year, Chinese behemoth BYD announced its Dolphin model to the European market at less than $21,550. The model is a rebrand of the Chinese Seagull model.

In comparison, Western EV-maker Tesla’s Model 3, the brand’s cheapest offering, is being sold for $44,480 in the United Kingdom. Electric vehicles made by Tesla in China also face a 9% tariff on imports to the EU.

Even with the 17% levy, BYD’s Dolphin model will still be about $23,270 cheaper than the China-imported Tesla Model 3.

To better compete with fierce Chinese rivals, German brand Volkswagen has announced plans to develop a low-cost electric vehicle for the European market at a comparable price of around $21,476 by 2027.

“Now, profitability takes a back seat to market share. The investment community rewards new, innovative EV players on the promise what they could be rather than short-term financial performance that legacy manufacturers are measured,” said McCabe.

“If they really have to kill the EV industry in China, they have to put in 300% of tariffs … which, you know, doesn’t make sense from my perspective,” William Ma, CIO of GROW Investment Group told CNBC’s “Street Signs Asia” on Tuesday.

If the Chinese original equipment manufacturing sector is affected, the risk of retaliatory tariff measures from China against Europe is high, McCabe warned.

EU tariff talks started in June as a response to “unfair subsidies” to Chinese EV makers, which pose “a threat of economic injury” to European EV counterparts.

“This geopolitical or sanction will not go away easily for the next year or two,” Ma said.

When Carmelita Fernandes, who lives in the Indian city of Pune, first made the switch from her regular car to an electric Tata Nixon in December 2021, she was excited for the journeys that would follow. After all, it was a “five-star rated car and sales were really skyrocketing in India” at the time, she said.

A little over two years after the switch, Fernandes regrets her decision: “I’ll never ever buy an electric vehicle again.”

In the first five months after the purchase, Fernandes’ car battery died halfway when she was on a 180-kilometer (111 miles) drive from Pune to Mumbai, two cities in the western state of Maharashtra.

The battery of the EV SUV that cost her 1.4 million Indian rupees ($16,700) tended to deplete faster than expected. “A 40% charge should easily take me for another 40km, but it dropped to 0% within 5km,” Fernandes said.

“If I can’t drive for four to five hours from Mumbai to Pune, I don’t think I can use the EV anywhere. It’ll be impossible to go to further cities like from Mumbai to Goa which are about 600km away from each other,” she told CNBC.

Fernandes’ story is not unique. In India, “Range anxiety” remains a significant hurdle preventing drivers from making the transition from internal combustion engine to EV cars, analysts said.

The world’s most populous country has an ambitious goal for 30% of newly registered private cars to be electric by 2030. However, out of around 4.2 million passenger vehicles sold last year, less than 2.5% were EVs, according to Bain & Company, an industry consulting firm.

“Charging infrastructure in India’s electric vehicle market is still not fully developed, but companies want more vehicles on the road before they invest more. On the other hand, potential electric vehicle buyers first want more chargers on the road,” said Brajesh Chhibber, partner at McKinsey India.

“It’s a chicken-or-egg problem on which should come first,” Chhibber told CNBC.

As of August 2023, Tata Motors dominated 72% of India’s EV market, followed by MG Motors with with a 10.8% share. EVs from Mahindra & Mahindra, Citroen, BYD, Hyundai and Kia make up the rest of the market, data from Canalys showed.

Boosting India’s charging infrastructure is a vital step that the government needs to take to reach its goal of making electric vehicles widespread by 2030, industry experts told CNBC.

After the U.S., India has the world’s second-largest road network, spanning 6.3 million kilometers.

However, as of February, there were roughly 12,100 public EV car chargers in the world’s most populous country, still far from the 1.32 million chargers needed by 2030.

But charging companies are hesitant to scale up infrastructure for fear that they would be underutilized, said Mihir Sampat, partner at Bain & Company in Mumbai.

“The economics of running a charging point station are fundamentally driven by how much your chargers are utilized,” Sampat said. “You ideally want chargers to be utilized at least 15-20% of the time. And for that, chargers need to be in an area with a dense EV population.”

There are around 200 EVs per commercial charging point in India, as compared to approximately 20 in the U.S. and less than 10 in China, according to a report published by Bain in December of last year.

Fernandes recounted how she would stop at the Khalapur Toll Plaza, on the Mumbai-Pune expressway, during her trips from Bombay to Pune to charge her EV. The chargers had to be booked long in advance or she couldn’t use them in a timely manner.

“It would sometimes ask me to wait for more than two hours to charge my car,” she said. “I end up using more power and wasting my battery by looking for a charger.”

Although the Indian government has made significant strides to increase the number of EV chargers on highways, infrastructure for intercity usage near shopping malls and office buildings need to be ramped up too, McKinsey’s Chhibber added.

A lack of charging infrastructure is not the only problem EV drivers are facing. High costs and low variety in models are two other factors keeping drivers from making the switch from ICE to EV cars, analysts said.

Maurti Suzuki, India’s largest carmaker, will only be releasing its first EV car model next year. While Tata only offers five EV car models, and MG Motors offers two, the company’s websites showed.

“Customers are pushing back on making the switch to EVs and are waiting for new products and a wider portfolio to come,” Chhibber said.

“India remains a very price sensitive four-wheeler market. Companies are going to have to develop lower cost EVs that are comparable to ICE cars,” Bain & Company’s Sampat said, adding that battery costs first need to come down.

The price of one of Tata’s Punch, one of its most popular ICE SUVs, start at 612,900 Indian rupees ($7,300), compared to its EV counterpart with a starting price of 1.1 million Indian rupees ($13,100)