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.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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