Investor's Corner
Tesla’s ‘delivery logistics hell’ is an encouraging sign for Q3’s Model 3 production
Tesla is now on full throttle as it attempts to deliver as many vehicles as it can to Model 3 reservation holders before the end of the third quarter. As the company hits new production levels for the electric car, Tesla is now finding itself facing yet another challenge — a new type of hell, even. As dubbed by Elon Musk in a recent tweet, Tesla has gone from “production hell” straight into “delivery logistics hell.”
Elon Musk was online this Sunday on Twitter, and during his interactions with his followers, he was faced with an inquiry from a Model 3 reservation holder whose delivery had been delayed multiple times. Megan Gale, the reservation holder, noted that her delivery date had been moved four times before she was informed that her Model 3’s handover had been delayed “indefinitely.”
Musk promptly admitted fault, stating that the company is currently facing challenges with delivery logistics. Musk did note, though, that delivery logistics hell is far more tractable than production hell; and thus, Tesla should be able to solve the issue shortly.
Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly.
— Elon Musk (@elonmusk) September 17, 2018
While there are now reservation holders being inconvenienced due to Tesla’s inability to deliver their vehicles on time, the current issue does indicate something notably positive for one of the company’s targets this Q3 — the production numbers of the Model 3. Tesla has announced that it is aiming to produce 50,000-55,000 Model 3 for the third quarter, and just recently, an email from Elon Musk to the company’s employees noted that Tesla would likely build and deliver around twice as many vehicles as it did last quarter.
If Tesla is on track in meeting the milestones Elon Musk outlined in his letter, the company’s delivery centers across the United States are likely experiencing an influx of vehicles at a scale they have never experienced before. For a company that is still finding its legs as a mainstream carmaker, this sudden increase in the number of impending deliveries would likely result in challenges.
This is not to say that Tesla is being caught off guard by its own production numbers. This quarter, the company has implemented programs designed to speed up the delivery process, such as the 5-Minute Sign & Drive delivery program. Unlike Tesla’s old delivery system that involves a thorough walkthrough of its electric cars’ functions, the 5-Minute Sign & Drive system only covers the basics of the vehicles. The electric cars’ more specific features and capabilities are expected to be reviewed by reservation holders prior to the delivery date. Back in July, Elon Musk also noted that Tesla is working on a system that would get rid of paper contracts completely by having customers sign necessary documents online. Musk further noted that in the future, Tesla’s customers should be able to return the electric cars just like any other consumer product, in the event that they are unsatisfied with the vehicle.
There is a lot at stake for Tesla this third quarter. After achieving its then-elusive goal of manufacturing 5,000 Model 3 per week at the end of Q2 2018, the company has focused itself on the task of pushing Model 3 production even further and ending the quarter as a profitable company. These goals are undoubtedly ambitious, but Tesla seems to have a shot at accomplishing just that. Analysts from Evercore ISI and Worm Capital, for one, have noted that with the right optimizations, Tesla should be able to maintain a steady production rate of 5,000-6,000 Model 3 per week. The Evercore ISI analysts even noted that with minimal CapEx, Tesla should be able to manufacture up to 8,000 Model 3 per week.
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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