

Investor's Corner
Tesla’s Gigafactory 3 is encouraging China’s local EV makers to be more competitive
Within the next few months, Tesla would begin exporting the Model 3 Performance and Long Range Model 3 AWD to the Chinese market. By the end of the year, the electric car maker aims to have the first Model 3 produced in Gigafactory 3, which will be equipped with both battery and electric car assembly lines.
There is a very good reason why the automotive industry is putting a lot of effort into saturating China. The country, after all, is the largest automobile market globally, both in terms of demand and supply. In 2017 alone, the country produced almost 25 million passenger cars and roughly 4 million commercial vehicles. The country is also a large market for electric vehicles, with sales of EVs hitting the 1 million mark in 2018, and estimates indicating that up to 2 million EVs could be sold in China by 2020.
Amidst this competitive car market lies Tesla and the upcoming Gigafactory 3. So far, Tesla’s electric cars — the Model S and Model X — have been competing in the Chinese market as higher-priced, premium alternatives to locally-made EVs. Tesla has been pretty successful in this sense, becoming a brand largely associated with status and quality, similar to other premium products such as the Apple iPhone. With Gigafactory 3, though, Tesla is stepping away from this strategy, as the facility is looking to produce the Model 3 and Model Y — affordable electric cars that can attack the much-larger, lower-end of the market.
While the presence of Tesla’s massive facility in Shanghai could result in more intense competition, though, some of the country’s local electric car companies have stated that they welcome the arrival of the Silicon Valley-based company nonetheless. In a statement to Xinhua News, Cui Dongshu, secretary general of the China Passenger Car Association, noted that the arrival of Gigafactory 3 would likely encourage local carmakers to step up their game. This, of course, benefits consumers.
“Tesla’s China production will have a ‘catfish effect’ in the country’s auto industry, pushing domestic carmakers to speed up their technological upgrading,” Cui said.
Jin Guoqing, deputy director of Chang’an Automobile, an automotive dynamics research institute, stated that his company would push its efforts even further now that Tesla has arrived in China, particularly as his firm targets a different price bracket and demographic compared to the American carmaker.
“We shall amplify our advantages to the most,” Jin said.
Legacy carmakers that are also attempting to breach the country’s lucrative and growing auto market are raising the stakes for their competition as well. Mercedes-Benz Parts Manufacturing & Service Ltd., for one, also inaugurated its first factory outside Europe last October. Just like Gigafactory 3, Mercedes-Benz’ factory is being built on the Lingang Area. BMW, on the other hand, also announced last October that it would be increasing its stake in BMW Brilliance Automotive, a joint venture located in in the northeastern city of Shenyang.
Ultimately, the arrival of Tesla’s Gigafactory 3 would likely boost the country’s electric car initiatives. Thus, apart from allowing Tesla to tap into what could very well be a lucrative market, Gigafactory 3 could also be the trigger that pushes even more innovation forward in the country. With vehicles such as the Model 3 and the Model Y saturating China, after all, competitors would be wise to come up with vehicles that are just as good or even better than Tesla’s electric cars.
Elon Musk, for his part, has expressed his high hopes for the facility. During an interview after the groundbreaking event, Musk stated that he has been very impressed with the construction capabilities of China so far. In his speech at the groundbreaking ceremony, Musk urged the country’s most driven workers to apply for a post in Gigafactory 3, even noting that maybe, just maybe, someone working in Gigafactory 3 could succeed him someday.
“I do want to emphasize that there’s no limit on the potential. One day, somebody could join us — a junior engineer here at Tesla Shanghai Gigafactory — and ultimately, maybe have my job someday,” Musk said.
Elon Musk
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
ISS said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

Tesla CEO Elon Musk’s $1 trillion pay package, which was proposed by the company last month, has hit its first bit of adversity from proxy advisory firm Institutional Shareholder Services (ISS).
Musk has called the firm “ISIS,” a play on its name relating it to the terrorist organization, in the past.
“ISIS”
— Elon Musk (@elonmusk) September 27, 2021
The pay package aims to lock in Musk to the CEO role at Tesla for the next decade, as it will only be paid in full if he is able to unlock each tranche based on company growth, which will reward shareholders.
However, the sum is incredibly large and would give Musk the ability to become the first trillionaire in history, based on his holdings. This is precisely why ISS is advising shareholders to vote against the pay plan.
The group said that Musk’s pay package will lock him in, which is the goal of the Board, and it is especially important to do this because of his “track record and vision.”
However, it also said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”
The release from ISS called the size of Musk’s pay package “astronomical” and said its design could continue to pay the CEO massive amounts of money for even partially achieving the goals. This could end up in potential dilution for existing investors.
If Musk were to reach all of the tranches, Tesla’s market cap could reach up to $8.5 trillion, which would make it the most valuable company in the world.
Tesla has made its own attempts to woo shareholders into voting for the pay package, which it feels is crucial not only for retaining Musk but also for continuing to create value for shareholders.
Tesla launched an ad for Elon Musk’s pay package on Paramount+
Musk has also said he would like to have more ownership control of Tesla, so he would not have as much of an issue with who he calls “activist shareholders.”
Investor's Corner
Barclays lifts Tesla price target ahead of Q3 earnings amid AI momentum
Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

Barclays has raised its price target for Tesla stock (NASDAQ: TSLA), with the firm’s analysts stating that the electric vehicle maker is approaching its Q3 earnings with two contrasting “stories.”
Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.
Tesla’s AI and autonomy narrative
Levy told investors that Tesla’s “accelerating autonomous and AI narrative,” amplified by CEO Elon Musk’s proposed compensation package, is energizing market sentiment. The analyst stated that expectations for a Q3 earnings-per-share beat are supported by improved vehicle delivery volumes and stronger-than-expected gross margins, as noted in a TipRanks report.
Tesla has been increasingly positioning itself as an AI-driven company, with Elon Musk frequently emphasizing the long-term potential of its Full Self-Driving (FSD) software and products like Optimus, both of which are heavily driven by AI. The company’s AI focus has also drawn the support of key companies like Nvidia, one of the world’s largest companies today.
Still cautious on TSLA
Despite bullish AI sentiments, Barclays maintained its caution on Tesla’s underlying business metrics. Levy described the firm’s stance as “leaning neutral to slightly negative” heading into the Q3 earnings call, citing concerns about near-term fundamentals of the electric vehicle maker.
Barclays is not the only firm that has expressed its concerns about TSLA stock recently. As per previous reports, BNP Paribas Exane also shared an “Underperform” rating on the company due to its two biggest products, the Robotaxi and Optimus, still generating “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” BNP Paribas, however, also estimated that Tesla will have an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040, and more than 11 million FSD subscriptions by 2030.
Investor's Corner
BNP Paribas Exane initiates Tesla coverage with “Underperform” rating
The firm’s projections for Tesla still include an estimated 525,000 active Robotaxis by 2030.

Tesla (NASDAQ: TSLA) has received a bearish call from BNP Paribas Exane, which initiated coverage on the stock with an Underperform rating and a $307 price target, about 30% below current levels.
The firm’s analysts argued that Tesla’s valuation is driven heavily by artificial intelligence ventures such as the Robotaxi and Optimus, which are both still not producing any sales today.
Tesla’s valuation
In its note, BNP Paribas Exane stated that Tesla’s two AI-led programs, the Robotaxi and Optimus robots, generate “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” The research firm’s model projected a maximum bull-case valuation of $2.7 trillion through 2040, but after discounting milestone probabilities, its base-case valuation remained at $1.02 trillion.
The analysts described their outlook as optimistic toward Tesla’s AI ventures but cautioned that the stock’s “unfavorable risk/reward is clear,” adding that consensus earnings expectations for 2026 remain too high. Tesla’s market cap currently stands around $1.44 trillion with a trailing twelve-month revenue of $92.7 billion, which BNP Paribas argued does not justify Tesla’s P/E ratio of 258.59, as noted in an Investing.com report.
Tesla and its peers
BNP Paribas Exane’s report also included a comparative study of the “Magnificent Seven,” finding Tesla’s current market valuation as rather aggressive. “Our unique comparative analysis of the ‘Mag 7’ reveals the extreme nature of TSLA’s valuation, as the market implicitly says TSLA’s 2035 earnings (~55% of which will be driven by Robotaxi & Optimus, w/ zero sales now) have the same level of risk & value-appropriation as the ‘Mag 6’s’ 2026 earnings,” the firm noted.
The firm’s projections for Tesla include an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040 priced above $20,000 each, and more than 11 million Full Self-Driving subscriptions by 2030. Interestingly enough, these seem to be rather optimistic projections for one of the electric vehicle maker’s more bearish estimates today.
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