Investor's Corner
Tesla Gigafactory 1 expands with massive new lot as site activity increases
Aerial photographs obtained by Teslarati have revealed that Tesla’s expansive new parking lot in Gigafactory 1 is practically complete. As seen in the latest images, which we obtained on June 1, Tesla is done overlaying its new lot with asphalt, and numerous electric posts now stand in the area.
Tesla started moving the land north of Gigafactory 1 sometime in March. As noted by avid members of the r/TeslaMotors community then, the new parking lot appears to be around 2,000 x 1,500 ft (roughly 600 m x 470 m). The massive parking lot seems to have been developed quickly as well, as aerial images captured a few weeks after initial reports of the project indicated that Tesla was halfway done overlaying the new lot with asphalt.
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- An aerial photo of Tesla’s Nevada Gigafactory as of June 1, 2018. [Credit: Joshua Mcdonald]
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- An aerial photo of Tesla’s Nevada Gigafactory as of June 1, 2018. [Credit: Joshua Mcdonald]
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- An aerial photo of Tesla’s Nevada Gigafactory as of June 1, 2018. [Credit: Joshua Mcdonald]
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- A close up of Tesla’s expansive new parking lot at Gigafactory 1. [Credit: Joshua Mcdonald]
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- An aerial photo of Tesla’s Nevada Gigafactory as of June 1, 2018. [Credit: Joshua Mcdonald]
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- A close up of Tesla’s expansive new parking lot at Gigafactory 1. [Credit: Joshua Mcdonald]
Overall, the latest developments in Gigafactory 1, together with the installation of solar panels at the facility’s roof, underscore increased activity within the factory itself. The site, after all, is working around the clock in order to ramp up production of the Model 3’s battery packs. Just last week, reports emerged that Tesla has flown in six airplanes’ worth of new robots and equipment from Europe, the first two of which had reportedly been delivered at the Sparks, Nevada facility.
According to people familiar with the matter, the deliveries of the robots were done “in a massive hurry.” One of the individuals, who spoke to Reuters, further noted that engineers from Grohmann, Tesla’s engineering arm in Germany, were also in Gigafactory 1 to help address production bottlenecks in the Model 3 battery pack line.
The Model 3 production ramp is Tesla’s primary objective this second quarter. Despite missing its goal of producing 2,500 Model 3 per week by the end of Q1 2018, Tesla has nonetheless maintained its expectations of producing the compact electric car at a rate of 5,000 per week by the end of Q2 2018. In order to accomplish this elusive goal, both Tesla’s Fremont factory and Gigafactory 1 have to work at optimum efficiency.
Recent signs of the developments in the Model 3 production line have been encouraging so far. In May alone, Tesla registered more than 18,000 new Model 3 VINs, a number that took the company until March to achieve, despite starting the production of the vehicle mid-2017. Apart from this, a leaked email from CEO Elon Musk to Tesla employees also revealed that the company has been producing the Model 3 at a consistent rate of 500 vehicles per day, or roughly 3,500 per week.
Optimizing Gigafactory 1 and refining the Model 3 production ramp are just a few steps in the company’s overall plans, however. During Tesla’s Q1 2018 earnings call, Tesla CEO Elon Musk revealed that the next Gigafactory would be built in China. What’s more, Musk also announced that the upcoming facility would have the capability to manufacture vehicles. Ultimately, Musk stated that “future Gigafactories will all incorporate vehicle production.”
Establishing its next Gigafactory in China is a strategic move for Tesla, considering that Elon Musk has specifically mentioned during Tesla’s Q3 2017 earnings call last November that the upcoming facility will be tasked with manufacturing the next vehicle in Tesla’s lineup — the Model Y, an all-electric, crossover SUV that is expected to have a demand that surpasses even that of the Model 3.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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