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Tesla starts setting the stage for the $35k base Model 3’s production ramp

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Tesla’s production ramp for the Model 3 has not been easy for the company. Since starting the production of the electric sedan last year, the Model 3 ramp has been beset by multiple challenges, including bottlenecks in both the Fremont factory and Gigafactory 1. That said, Tesla appears to have hit its stride in manufacturing the electric sedan in Q3.

The company’s production and delivery numbers for the quarter are yet to be announced, but estimates, including those from Tesla’s staunchest critics from Wall Street, are high that the company has achieved its target of manufacturing and delivering more than 50,000 Model 3 in the third quarter. And this is despite the company only producing three variants of the electric sedan — the Long Range RWD, Dual Motor AWD, and Dual Motor Performance Model 3. The variant of the electric car that is designed to be a true disruptor in the auto industry — the $35,000 Standard trim Model 3 — is yet to enter production. 

The absence of the $35,000 base trim Model 3 in Tesla’s lineup is one of the remaining bear thesis against the company. Some of Tesla’s more aggressive short-sellers even insist that the $35,000 Model 3 is a myth. Kelly Blue Book analyst Rebecca Lindland, who canceled her Model 3 reservation due to delays in the electric car’s production, previously noted to Forbes that she is not sure Tesla will ever make the vehicle.

“I’m not sure there will ever be any $35,000 cars. I think there’s a chance the company will eventually say they’re canceling that version because there wasn’t as much customer interest, that nobody wanted it,” she said.

A Tesla Model 3 being assembled.

Elon Musk begs to differ. Earlier this year, Musk noted that Tesla would need to hit its stride producing the higher-margin Model 3 variants before it can begin manufacturing the $35,000 Standard trim Model 3. Musk has since provided brief updates on the vehicle, such as its estimated start of production in Q1 2019, as well as an AWD Dual Motor option for the electric car. Tesla’s head of investor relations Martin Viecha provided an estimated timeline for the electric car’s production while facilitating a tour of Gigafactory 1 as well, stating that the $35,000 base Model 3’s would ramp “in the next eight months,” translating to an April or May rollout.   

Considering recent updates from Tesla’s Model 3 ramp, it appears that the electric car maker is starting to make preparations for the vehicle’s production. Gigafactory 1, for example, is set to receive upgrades from Panasonic that would enable it to produce more battery cells. Yoshio Ito, head of Panasonic’s automotive business, noted that three new battery cell production lines would be completed sooner than the Japanese company’s initial “end-of-2018” estimate. Apart from this, Tesla is also receiving upgrades in the form of new Grohmann machines that are expected to be installed at the end of Q3 or the beginning of Q4. The new Grohmann machines are designed to make module production in Gigafactory 1 three times faster and three times cheaper.

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In the final weekend of Q3, updates from Elon Musk and the Tesla community suggested that the production ramp for the Model 3 is going even further. In an email to employees, Musk noted that production of Model 3 drive units had reached a rate of 10,000 per week. Reservation holders in forums such as the r/TeslaMotors subreddit have also noted that the estimated timeline for the $35,000 base Model 3 has remained consistent over the past months. As of October 1, reservation holders are given a 3-6 month timeline for the production of the $35,000 electric sedan.

Tesla’s estimated timeline for the $35,000 Standard trim Model 3 as of October 1, 2018. [Credit: teslamodel3fan/Reddit]

The Tesla Model 3 is a critical part of Elon Musk’s Master Plan, which involved creating a mass-market car that is a preferable alternative to comparably-priced fossil fuel-powered vehicles. At $35,000, the Standard trim Model 3 would be in the same price range as some of America’s most ubiquitous cars like the Toyota Camry, whose top-of-the-line XSE V6 trim is priced at $34,950. Thus, if Tesla plays its cards right, the vehicle could become not just a top-selling electric car — it could very well be a fossil fuel car killer.

In true Tesla fashion, even the $35,000 Standard trim Model 3 is packed with features that are characteristic of the company. The base Model 3 has an estimated range of 220 miles per charge, a 0-60 mph time of 5.6 seconds, and a top speed of 130 mph. Just like Tesla’s less affordable vehicles, the base Model 3 is fitted advanced safety features, including eight cameras, forward radar, and 12 ultrasonic sensors enabling active safety technologies including collision avoidance and automatic emergency braking. Six front row airbags and two side curtain airbags are also fitted on the entry-level vehicle.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

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Credit: Tesla

Tesla (NASDAQ: TSLA) is being called “the biggest meme stock we’ve ever seen” by Yale School of Management Senior Associate Dean Jeff Sonnenfeld, who made the comments in a recent interview with CNBC.

Sonnenfeld’s comments echo those of many of the company’s skeptics, who argue that its price-to-earnings ratio is far too high when compared to other companies also in the tech industry. Tesla is often compared to companies like Apple, Nvidia, and Microsoft when these types of discussions come up.

Fundamentally, yes, Tesla does trade at a P/E level that is significantly above that of any comparable company.

However, it is worth mentioning that Tesla is not traded like a typical company, either.

Here’s what Sonnenfeld said regarding Tesla:

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“This is the biggest meme stock we’ve ever seen. Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”

Many analysts have admitted in the past that they believe Tesla is an untraditional stock in the sense that many analysts trade it based on narrative and not fundamentals. Ryan Brinkman of J.P. Morgan once said:

“Tesla shares continue to strike us as having become completely divorced from the fundamentals.”

Dan Nathan, another notorious skeptic of Tesla shares, recently turned bullish on the stock because of “technicals and sentiment.” He said just last week:

“I think from a trading perspective, it looks very interesting.”

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Nathan said Tesla shares show signs of strength moving forward, including holding its 200-day moving average and holding against current resistance levels.

Sonnenfeld’s synopsis of Tesla shares points out that there might be “a little too much emphasis on the magic wand of Musk.”

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

This could refer to different things: perhaps his recent $1 billion stock buy, which sent the stock skyrocketing, or the fact that many Tesla investors are fans and owners who do not buy and sell on numbers, but rather on news that Musk might report himself.

Tesla is trading around $423.76 at the time of publication, as of 3:25 p.m. on the East Coast.

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Elon Musk affirms Tesla commitment and grueling work schedule: “Daddy is very much home”

The remarks came as Tesla shares crossed the $400 mark on the stock market.

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Tesla CEO Elon Musk reiterated his commitment to the electric vehicle maker and its future projects this week, responding to speculation following his $1 billion purchase of TSLA stock. 

The remarks came as Tesla shares crossed the $400 mark on the stock market, extending a rally fueled in part by Musk’s TSLA purchase.

Elon Musk’s nonstop work schedule

Amidst the reaction of TSLA stock to Musk’s $1 billion investment, Tesla owners such as @greggertruck noted that “Daddy’s home.” Musk replied, stating that “Daddy is very much home.” He then shared details of a packed weekend of work, which was definitely grueling but completely within character for a “wartime CEO.”

Musk did note, however, that he had lunch with his kids during the weekend despite his extremely busy schedule.

“Daddy is very much home. Am burning the midnight oil with Optimus engineering on Friday night, then redeye overnight to Austin arriving 5am, wake up to have lunch with my kids and then spend all Saturday afternoon in deep technical reviews for the Tesla AI5 chip design. 

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“Fly to Colossus II on Monday to walk the whole datacenter floor, review transformers and power production (excellent progress), depart midnight. Then up to 12 hours of back-to-back meetings across all Tesla departments, but with a particular focus on AI/Autopilot, Optimus production plans, and vehicle production/delivery,” Musk wrote in his post

Wartime CEO

Wedbush analyst Dan Ives described Musk as operating in “wartime CEO mode,” highlighting autonomous driving and AI as a trillion-dollar market opportunity for Tesla. Musk reiterated this point late last month as well, when he outlined the several projects he is juggling among his numerous companies. At the time, Musk stated that he was busy with Starship 10, Grok 5, and Tesla V14. This was despite his notable presence on X. 

With Tesla Master Plan Part IV being partly released, the company is entering what could very well be its most ambitious stage to date. To usher in an era of sustainable abundance, Tesla would definitely require a “wartime CEO,” someone who could remain locked in and determined to push through any obstacles to ensure that the company achieves its goals.

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Tesla analyst says Musk stock buy should send this signal to investors

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

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(Credit: Tesla)

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.

One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Dorsheimer said in the note:

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”

Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.

He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.

Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.

In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:

“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”

Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.

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