

Investor's Corner
Elon Musk delves into Tesla’s China Gigafactory funding and development plans
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.
“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.
Investor's Corner
xAI targets $5 billion debt offering to fuel company goals
Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.
Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.
According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.
Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.
Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.
As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.
Elon Musk
Tesla tops Cathie Wood’s stock picks, predicts $2,600 surge
Tesla’s future lies beyond cars—with robotaxis, humanoid bots & AI-driven factories. Cathie Wood predicts a 9x surge in 5 years.

Cathie Wood shared that Tesla is her top stock pick. During Steven Bartlett’s podcast “The Diary Of A CEO,” the Ark Invest founder highlighted Tesla’s innovative edge, citing its convergence of robotics, energy storage, and AI.
“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wood said of Tesla. She emphasized the company’s potential beyond its current offerings, particularly with its Optimus robots.
“And it’s not stopping with robotaxis; there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” she added.
In June 2024, Ark Invest issued a $2,600 price target for Tesla, which Wood reaffirmed in a March Bloomberg interview, projecting the stock to reach this level within five years. She told Bartlett that Tesla’s Optimus robots would drive productivity gains and create new revenue streams.
Elon Musk echoed Wood’s optimism in a CNBC interview last month.
“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year, beginning this fall. And we expect to scale Optimus up faster than any product, I think, in history to get to millions of units per year as soon as possible,” Musk said.
Tesla’s stock has faced volatility lately, hitting a peak closing price of $479 in December after President Donald Trump’s election win. However, Musk’s involvement with the White House DOGE office triggered protests and boycotts, contributing to a stock decline of over 40% from mid-December highs by March.
The volatility in Tesla stock alarmed investors, who urged Musk to refocus on the company. In a May earnings call, Musk responded, stating he would be “scaling down his involvement with DOGE to focus on Tesla.” Through it all, Cathie Wood and Ark Invest maintained their faith in Tesla. Wood, in particular, predicted that the “brand damage” Tesla experienced earlier this year would not be long term.
Despite recent fluctuations, Wood’s confidence in Tesla underscores its potential to redefine industries through AI and robotics. As Musk shifts his focus back to Tesla, the company’s advancements in Optimus and other innovations could drive it toward Wood’s ambitious $2,600 target, positioning Tesla as a leader in the evolving tech landscape.
Investor's Corner
Goldman Sachs reduces Tesla price target to $285
Despite Goldman Sach’s NASDAQ: TSLA price cut to $285, Tesla boasts $95.7B in revenue & nearly $1T market cap.

Goldman Sachs analysts cut Tesla’s price target to $285 from $295, maintaining a Neutral rating.
The adjustment reflects weaker sales performance across key markets, with Tesla shares trading at $284.70, down nearly 18% in the past week. The analysts pointed to declining sales data in the United States, Europe, and China as the primary driver for the revised outlook. In the U.S., Tesla’s quarter-to-date deliveries through May fell mid-teens year-over-year, according to Wards and Motor Intelligence.
In Europe, April registrations plummeted 50% year-over-year, with May showing a mid-20% decline, per industry data. Meanwhile, the China Passenger Car Association (CPCA) reported a 20% year-over-year drop in May, despite a 5.5% sequential increase from April. Consumer surveys from HundredX and Morning Consult also shaped Goldman Sachs’ lowered delivery and EPS forecasts.
Goldman Sachs now projects Tesla’s second-quarter deliveries to range between 335,000 and 395,000 vehicles, with a base case of 365,000, down from a prior estimate of 410,000 and below the Visible Alpha Consensus of 417,000. Despite these headwinds, Tesla’s financials remain strong, with $95.7 billion in trailing twelve-month revenue and a $917 billion market capitalization.
Regionally, Tesla’s challenges are stark. In Germany, the German road traffic agency KBA reported Tesla’s May sales dropped 36.2% year-over-year, despite a 44.9% surge in overall electric vehicle registrations. Tesla’s sales fell 29% last month in Spain, according to the ANFAC industry group. These declines highlight shifting consumer preferences amid growing competition.
On a positive note, Tesla is making strategic moves. The Model 3 and Model Y are part of a Chinese government campaign to boost rural sales, potentially mitigating losses. Piper Sandler analysts reiterated an Overweight rating, emphasizing Tesla’s supply chain strategy.
Alexander Potter stated, “Thanks to vertical integration, Tesla is the only car company that is trying to source batteries, at scale, without relying on China.”
As Tesla navigates these delivery challenges, its focus on innovation and supply chain resilience could help it maintain its edge in the electric vehicle market despite short-term hurdles.
-
News1 week ago
Tesla to lose 64 Superchargers on New Jersey Turnpike in controversial decision
-
News2 weeks ago
Tesla gets major upgrade that Apple users will absolutely love
-
News2 weeks ago
Tesla teases new color while testing refreshed Model S, X
-
Elon Musk2 weeks ago
Tesla investors demand 40-hour workweek from Elon Musk
-
Elon Musk1 week ago
Elon Musk explains Tesla’s domestic battery strategy
-
News1 day ago
I took a Tesla Cybertruck weekend Demo Drive – Here’s what I learned
-
News2 weeks ago
Tesla Cybertrucks join Jalisco’s police fleet ahead of FIFA World Cup
-
News2 weeks ago
Tesla rolls out new crucial safety feature aimed at saving children