Investor's Corner
Elon Musk explains why Tesla built a tent for its new Model 3 assembly line
Tesla CEO Elon Musk has taken to Twitter to discuss why the company decided to set up its newest assembly line for the Model 3 inside a massive tent on the grounds of the Fremont factory. According to Musk, the tent was the result of time constraints, as the company is attempting to hit a pace equivalent to 5,000 Model 3 per week by the end of Q2 2018.
Needed another general assembly line to reach 5k/week Model 3 production. A new building was impossible, so we built a giant tent in 2 weeks. Tesla team kfa!! Gah, love them so much ♥️🚘💫
— Elon Musk (@elonmusk) June 19, 2018
What’s even more remarkable was that some of the materials used by the Tesla team in constructing the giant tent were scraps the company had in its warehouses. In a later tweet, Musk noted that the tent-housed new line is actually “way better” than Tesla’s other general assembly line, which cost the company hundreds of millions of dollars.
Overall, Musk appears to be optimistic about Fremont’s giant tent. When asked by one of his Twitter followers if the structure is just a temporary solution to achieve the company’s goal of building 5,000 Model 3 per week, Musk stated that he was not sure if Tesla actually needs a building, considering that the tent was already “pretty sweet.” Musk also mentioned that the Tesla Grohmann line is now in place and operating at Gigafactory 1.
Not sure we actually need a building. This tent is pretty sweet. Tesla Grohmann line is in place at Giga & spooling up now. They super kicked ass too. Heiliger Strohsack!
— Elon Musk (@elonmusk) June 19, 2018
As for worries that Tesla’s workers at the giant tent in Fremont will be uncomfortable, Musk noted that the massive outdoor structure had a view of the surrounding Bay Area mountains and is actually more comfortable than the buildings of the factory. The Tesla CEO further stated that a media tour would probably be held next week, in order to give recognition to the Tesla team, which has pulled off something “miraculous.”
Tesla’s massive tent in Fremont was first spotted by Tesla enthusiasts earlier this month through online services such as Building Tesla. As could be seen in satellite photos of the site, Tesla’s new Model 3 assembly line was around 900 feet in length as of mid-June. Speculations were abounding then among Tesla enthusiasts about what the structure would be used for.
These speculations were addressed this past weekend, when Elon Musk shared a picture featuring the first Model 3 Performance Dual Motor being rolled off the company’s newest assembly line. As noticed by Tesla supporters and critics alike, the vehicle seemed to have been assembled inside a massive tent.
Tesla’s new assembly line bodes well for the company’s chances of hitting its production goals for the Model 3 this quarter. Since the company began manufacturing the compact electric car, it has so far missed its production targets. During Q1 2018, however, Tesla ended the quarter just short of a few hundred Model 3. Since then, the company has doubled down on its efforts to scale the production of the vehicle. New assembly lines were installed, robots and equipment were flown in from Europe, bottlenecks were addressed, record numbers of new Model 3 VINs were registered, and orders for the Model 3’s next two variants — the Performance and Dual Motor AWD — were opened for reservation holders. As the month ends, Tesla is closer than it has ever gone in attaining its ever-elusive goal of producing 5,000 Model 3 per week.
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
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