Investor's Corner
Inside Tesla’s ‘tent’-based Model 3 line that set a path to profitability
Tesla attracted more headlines than usual when Elon Musk announced on Twitter that the company is introducing a new Model 3 assembly line inside a sprung structure on the grounds of the Fremont factory. Casually dubbed by Elon Musk as a “tent,” the assembly line, dubbed GA4, played a huge part in pushing Tesla towards profitability in the third quarter.
Tesla’s “tent”-based Model 3 assembly line was featured in Elon Musk’s recent segment on CBS’ 60 Minutes. While speaking with correspondent Leslie Stahl, Musk remarked that the assembly line, which took only three weeks to set up, was responsible for boosting Model 3 production by 50%. That was enough to push the company to reach its self-imposed 5,000 Model 3 per week target in the second quarter.
Elon Musk has noted that Tesla is now at a point when it could produce 5,000 Model 3 per week without any problems. Before the company reached this point, though, it had to pass through a period that Musk personally described as “production hell.” During the second quarter, Tesla struggled to ramp Model 3 output using the vehicle’s two assembly lines inside the Fremont factory itself. When it was evident that this could not be achieved, Tesla did the unexpected — it built a third Model 3 line (GA4) to augment its output.
The construction of the “tent”-based line was lauded by the company’s supporters and criticized heavily by Tesla’s skeptics. Inasmuch as the sprung structure was controversial, though, it worked, and it ultimately helped Tesla address the Model 3’s production problems then. When he announced the promotion of Jerome Guillen as Tesla’s new President of Automotive, Musk stated that GA4 was the brainchild of the longtime problem-solver, who was working as the lead of the Tesla Semi program then. Considering how much GA4 helped Tesla reach its production goals, it is not difficult to speculate that the construction of GA4 was one of the reasons behind Jerome Guillen’s promotion to President of Automotive.
CBS correspondent Leslie Stahl noted during the recent 60 Minutes segment that the “tent”-based Model 3 line, contrary to Elon Musk’s initial plans for a fully-automated car factory, is currently filled with human workers. Musk noted during the segment that “People are way better at dealing with unexpected circumstances than robots,” while sharing a laugh with some workers assembling the Model 3.
Speaking with investors back in 2016, Elon Musk noted that Tesla’s electric car factories will be a “machine that builds the machine.” Musk even shared that the codename for the project is “Alien Dreadnought” — a reference to the hyper-advanced extraterrestrial crafts featured in sci-fi films and literature. The CEO initially estimated the dreadnought to be operational by the end of 2018, though the “production hell” that ensued during the Model 3 ramp forced Elon Musk to admit that over-automation was a mistake. Admitting his miscalculation on Twitter, Musk humbly noted that “humans are underrated.”
If there is one lesson that Tesla learned this year, it is that unorthodox solutions such as its “tent”-based Model 3 line — while a step away from Elon Musk’s original vision — are needed for the company to hit its goals. Using a makeshift production line that’s populated with human workers might not be part of Elon Musk’s “Alien Dreadnought,” but it was exactly what Tesla needed to push towards its manufacturing targets. If any, Tesla’s stellar performance in the third quarter, when it surprised Wall Street and skeptics by posting $6.8 billion in revenue, was made possible in no small part by the “tent”-based Model 3 assembly line.
Ultimately, GA4 could serve as a template for the company’s upcoming electric car production facilities, particularly as Tesla is currently setting the stage for Gigafactory 3, which would produce the Model 3 and Model Y for the local Chinese market. Gigafactory 3 is in an extremely aggressive timetable — one which Wall Street even dubbed as “not feasible.” If Tesla can maintain its open-mindedness and its tendency to adopt out-of-the-box solutions, though, even ambitious projects such as Gigafactory 3 would be more than feasible.
Watch 60 Minutes‘ segment on Tesla’s “tent”-based Model 3 assembly line in the video below.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
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