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Elon Musk delves into Tesla’s China Gigafactory funding and development plans

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During Tesla’s Q2 2018 earnings call on Wednesday, CEO Elon Musk and Tesla’s executive team revealed details about the company’s plans for Gigafactory 3 in China. The overseas facility is a strategic move that will allow the California-based company to compete in China’s local electric car market and minimize logistical challenges with shipping abroad. More importantly, having a local presence will allow Tesla to skirt steep import tariffs placed on vehicles that are brought into the country.

Considering Tesla CEO Elon Musk’s stance on Tesla not needing a capital raise, and with the company well into its process of leaving Model 3’s production hell, concerns are abounding about the company’s capability to fund the Shanghai project. After all, if Gigafactory 1’s estimated $5 billion cost is any indication, Gigafactory 3 would likely require a substantial investment. Joseph Spak of RBC Capital Markets addressed this concern during the Q2 earnings call, when he asked about the linear costs for the upcoming facility.

Musk stated that Tesla’s next Gigafactory would likely not cost as much as Gigafactory 1 in Nevada, with the project having closer to $2 billion CapEx, not more than half the CapEx of Gigafactory 1.

“We’re confident we can do the Gigafactory in China for a lot less. I think it’s probably closer—this is just a guess—to $2 billion. That would sort of be the 250,000-vehicle per year rate. So, I think we could be a lot more efficient with cutbacks and that would include at least the battery module and pack production, body shop, paint shop, and general assembly. It might even be less than that.”

Tesla CTO JB Straubel also noted that lessons learned from Gigafactory 1 would be applied to the upcoming facility. According to Straubel, Tesla had already increased production rates by 20% just through tweaks in the production line of its US facilities without CapEx. With “strategic” CapEx, Straubel stated that Tesla can achieve more.

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“We found a surprising amount of ways to improve efficiency and speed and density as well in Gigafactory 1. And all those lessons will absolutely be shared with Gigafactory 3. The teams are already, of course, beginning to collaborate and start to do this more efficiently with less cutbacks than last time,” he said.

Consumer Edge Research analyst James Albertine also inquired about the China Gigafactory, asking about where Tesla intends to find funding for the project. According to Musk, Tesla intends to access loans from local banks in China. Plans are also underway for Tesla to start paying off loans with internal cash flow, instead of refinancing. Musk also noted that while construction for the facility would be underway, Tesla’s initial investment will not start “in any significant way” until 2019. 

“We will not be raising any equity at any point. At least, I don’t have expectations or plans to do so. For China, our plan will be to use a loan from the local banks and fund the Gigafactory in Shanghai with local debt, essentially. We could raise money, but I don’t think we need to. I think it’s better to just not to. The whole plan is we start paying off our debts. I mean, paying them off. We expect to pay that off with total cash flow.”  

Unlike Gigafactory 1 in Nevada, Gigafactory 3 will be a facility that incorporates both battery pack and electric car production. In true Tesla fashion, Gigafactory 3 is following an aggressive timeline, with construction set to begin as soon as the necessary permits are completed. Tesla expects to start producing vehicles in the facility as early as 2020. Once complete, Gigafactory 3 is expected to produce 500,000 vehicles per year.

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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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Elon Musk

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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Elon Musk

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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Elon Musk

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

Prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

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Gage Skidmore from Surprise, AZ, United States of America, CC BY-SA 2.0 , via Wikimedia Commons


Tesla (NASDAQ:TSLA) shares rose on Monday after CEO Elon Musk disclosed a rare insider purchase of company stock worth about $1 billion. 

A filing with the U.S. Securities and Exchange Commission (SEC) revealed that Musk acquired 2.57 million shares last Friday at various prices. The move represents Musk’s largest TSLA purchase ever by value, as per Verity data.

Elon Musk’s TSLA purchase

The disclosure sent Tesla shares up more than 8% in premarket trading Monday, as investors read the purchase as a notable vote of confidence, as stated in a CNBC report. Tesla stock had closed slightly lower Friday but remains more than 25% higher over the past three months. It should be noted that prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

Market watchers say the purchase could help shore up investor sentiment amid a volatile year for TSLA stock. Shares have faced pressure from a variety of factors, from year-over-year sales challenges due to the new Model Y changeover, political controversies tied to Musk, and reduced U.S. incentives for EVs under the Trump administration. Nevertheless, analysts such as Wedbush’s Dan Ives stated that Musk’s purchase was a “huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”

Tesla and Elon Musk

Musk already owns about 13% of Tesla, and his latest purchase comes as the company prepares for a key shareholder vote in November. Investors will decide whether to approve a compensation package for Musk that could ultimately be worth as much as $975 billion if ambitious market value milestones are achieved. The package has a long-term target of pushing Tesla’s market capitalization to $8.5 trillion, compared with about $1.3 trillion at Friday’s close.

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Wall Street’s current consensus price target still implies a roughly 20% decline from current levels, though some Tesla bulls remain optimistic that the company could shift its focus toward autonomy, AI, and robotics. Musk has also asked shareholders to approve an investment into his latest venture, xAI.

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