Investor's Corner
Tesla’s timeline for Gigafactory 3 in China is actually pretty conservative
Following reports that Tesla CEO Elon Musk has signed a preliminary agreement with Chinese authorities to build a solely-owned facility in Shanghai, questions have been raised by Wall St. skeptics and investors alike on how the California-based electric carmaker plans to fund development of its overseas factory.
Dubbed Gigafactory 3, the planned facility in China is expected to produce as many as 500,000 electric vehicles per year, doubling the production capacity of Tesla’s current facilities, and begin construction once permits and approvals are completed.
Tesla noted on Tuesday that vehicle production at Gigafactory 3 would start roughly two years after its construction begins, and ramp to a 500,000 vehicle per year production rate within 2-3 years. Such an aggressive timeline is classic Elon Musk, especially considering that components of Gigafactory 3, such as the advanced manufacturing robots and machinery that would be used to build the vehicles, would likely be coming from abroad. In a recent segment of Bloomberg Markets, Consumer Edge Research senior auto analyst James Albertine stated that the timeline of Gigafactory 3’s construction is simply “not feasible.”
While aiming to have its first electric cars roll off Gigafactory 3’s vehicle assembly lines within two years from construction is undoubtedly an ambitious goal, Tesla’s target dates are a lot more conservative than what critics would think. For one, Gigafactory 3 is being built in China, a country with a construction workforce that is optimized for quick, large-scale projects. This is something that Musk had mentioned back in February, when he noted that China’s progress in advanced infrastructure is “more than 100 times faster than the US.”
Musk’s statement on Twitter about China’s advanced infrastructure is reflected by feats of construction from the country’s workforce. Earlier this year, 1,500 workers in Eastern China set up a track replacement for a train station in just 8.5 hours. A time-lapse video of the event became viral, mainly due to the project having been conducted with near-surgical precision. Back in 2015, China also made headlines for its rapid construction after Broad Sustainable Building, a prefab construction firm in the Hunan province, managed to complete a 57-story skyscraper in just 19 days using a modular building method.
Also, if Tesla’s Nevada Gigafactory is any indication, the entire facility does not need to be completed before it can start its operations. Tesla started brush clearing and grading the land for Gigafactory 1 in the summer of 2014, and as of date, the expansive battery factory is still less than 30% complete. Despite this, the facility has already stepped up to provide enough battery packs to support the ongoing ramp for the Model 3, which recently managed to exceed a rate of 5,000 vehicles per week.
Drawing parallels to the sequence of events that have taken place at Tesla’s Nevada-based Gigafactory 1 over the years, reaching completion of several key sections in the China factory would be enough for the company to begin manufacturing of its vehicles without prior to full factory buildout. Considering the speed of China’s workforce, these key sections would likely be finished earlier than Tesla’s estimated two-year timeline.
Shanghai Municipal Party Committee Secretary Li Qiang meets with Elon Musk. [Credit: Weibo]
If there is one thing that could put a damper on the rapid development of Tesla’s China factory, it would be the funding needed for the ambitious project. Gigafactory 1 in Nevada, which produces battery packs, motors, and drivetrains, is estimated to cost around $5 billion when complete. Gigafactory 3, which incorporates both battery and vehicle production, would likely be in the same ballpark, if not more expensive.
With the state of Tesla’s finances today, the company has three main options to come up with the money to build Gigafactory 3. Tesla could go back to the equity market to fund the facility’s construction, just as it has done before. The company could also raise “debt” financing, however, its credit rating may have an impact on the company’s ability to negotiate favorable terms. One likely option that would allow Tesla to quickly fund the development of its factory in China is to partner with local investment banks. One of Tesla’s largest shareholders, China-based Tencent, already owns a 5% stake in the company.
There is also a fairly good chance that Tesla would receive major subsidies and tax relief from the Chinese government. The country, after all, is aggressively pushing electric cars as a preferred mode of transportation, with the country aiming to sell 2 million electric vehicles by 2020 and attain an ICE to EV ratio of 1:1 by 2030. With these own goals in mind, it does appear that it would be in China’s best interests to ensure that Tesla manages to build Gigafactory 3 without any difficulty. After all, the faster Tesla can start building its vehicles like the Model Y crossover SUV and some of the Model 3 in China, the better it would be for the country’s electric car market.
Elon Musk has firmly denied recent media reports suggesting that SpaceX has reduced its target valuation for an upcoming initial public offering.
The denial came directly from the SpaceX and Tesla frontman on his social media platform X, where he responded with a single word, “False,” to a post from ZeroHedge that cited Bloomberg sources.
This swift rebuttal underscores Musk’s ongoing effort to manage speculation surrounding one of the most anticipated market debuts in recent history.
False
— Elon Musk (@elonmusk) May 29, 2026
According to the disputed reports, SpaceX had lowered its IPO valuation goal to at least $1.8 trillion from previous ambitions exceeding $2 trillion.
The claims emerged amid growing anticipation for the company’s confidential S-1 filing, which positions it for a potential public listing as early as June.
Some had pointed to strong revenue growth, particularly from the Starlink satellite internet service, which contributed heavily to the firm’s 2025 figures of $18.7 billion. Yet challenges persist in other areas, including substantial investments and losses tied to ambitious projects like Starship development and artificial intelligence initiatives, which plan to make life multiplanetary eventually.
Musk’s response highlights a pattern in which he actively counters what he views as inaccurate portrayals of his companies’ trajectories.
SpaceX, already valued privately at extraordinary levels, stands as a cornerstone of Musk’s empire alongside Tesla and xAI. The entrepreneur has long emphasized the transformative potential of reusable rockets and global broadband access, factors that fuel investor enthusiasm despite operational hurdles.
By rejecting the valuation downgrade narrative, Musk signals confidence in SpaceX’s fundamentals and its readiness for public markets on terms favorable to its long-term vision. People have been waiting a very long time to invest in SpaceX, and the valuation, as well as the introductory share price, is not going to need adjusting.
They’ll have plenty of suitors.
This episode reflects broader dynamics in the technology sector, where rumors often swirl around high-profile entities. Musk’s direct engagement with media narratives serves to maintain transparency and control the narrative around his ventures.
As SpaceX prepares for greater scrutiny in public markets, the founder’s denial reinforces optimism about its prospects. Supporters argue that the company’s innovative edge positions it for enduring success, far beyond short-term valuation debates. With the denial now public, attention turns to forthcoming regulatory filings that could provide clearer insights into SpaceX’s strategy and financial health.
The coming weeks promise to reveal more about how SpaceX will transition into a publicly traded powerhouse.
Elon Musk
The Tesla and SpaceX merger everyone is talking about is quietly building
Tesla and SpaceX may be closer to merging than Wall Street or either company is admitting.
Elon Musk has reportedly discussed merging Tesla and SpaceX with people close to him, according to CNBC, which cited sources familiar with the conversation. Tesla employees have long expected such a transaction and the topic is openly discussed internally, according to internal sources. With SpaceX is days away from kicking off its Wall Street roadshow for what could be the largest IPO in market history, this would be the first time the company will have public market currency to execute a stock-for-stock deal with Tesla.
The financial logic for a merger would make sense. A combined SpaceX and Tesla would create a conglomerate spanning rockets, satellites, electric vehicles, AI infrastructure, and energy storage valued at roughly $3.35 trillion to $3.6 trillion based on SpaceX’s IPO target range and Tesla’s current market capitalization. The two companies are already more intertwined than most people realize. SpaceX bought $697 million worth of Tesla Megapack systems for xAI data centers and $131 million worth of Cybertrucks. Tesla invested $2 billion in xAI, which subsequently merged with SpaceX. Past transactions also include Tesla selling solar equipment and parts to SpaceX, and SpaceX helping with Cybertruck materials.
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Musk himself signaled where this was heading in November 2025 when he posted on X, “My companies are, surprisingly in some ways, trending towards convergence.” Tesla and SpaceX announced a joint semiconductor fabrication facility in Austin called Terafab on the Gigafactory Texas campus, covering two advanced chip factories, with one serving Tesla’s AI needs for vehicles and Optimus robots, the other targeting space-based data centers under SpaceX’s infrastructure vision.
Wedbush analyst Dan Ives places the probability of a merger at 80% to 90% with a target completion in the first half of 2027. The mechanics of a deal became possible the moment SpaceX filed its S-1. Legal experts said a merger likely would not spark antitrust issues but would raise concerns among shareholders in each company, with questions around which company would be the parent, how a stock swap would take place, and who determines the appropriate price. Musk holds about 20% of Tesla’s equity but controls 85.1% of SpaceX’s voting power through a super-voting share class, meaning he would largely be negotiating the terms with himself.
Not everyone is convinced the timing is imminent. Traders on Kalshi place only 33% odds that a merger will happen before May 2027. The more immediate concern for Tesla shareholders is whether the SpaceX IPO pulls capital and Musk’s attention away from Tesla before any merger consolidates the upside for both.
What is clear is that the structural groundwork is already being laid. The Terafab announcement, the xAI merger, the shared supply chain, the cross-company balance sheet transactions, and now the IPO all point in the same direction. Whether the merger follows in 2027 or later, the two companies are already operating more like divisions of a single entity than independent competitors.
Elon Musk
SpaceX just filed for the IPO everyone was waiting for
SpaceX filed its public S-1, revealing $18.7 billion in revenue and billions in losses.
SpaceX publicly filed its S-1 registration statement with the Securities and Exchange Commission on May 20, 2026, making its financial details available to the public for the first time ahead of what could be the largest IPO in history.
An S-1 is the formal document a company must submit to the SEC before going public. It includes audited financials, risk factors, business descriptions, and how the company plans to use the money it raises. Companies are required to file one before selling shares to the public, and it must be published at least 15 days before the investor roadshow begins. SpaceX had already submitted a confidential draft to the SEC in April, which allowed regulators to review the filing privately before it went public.
The S-1 reveals that SpaceX generated $18.7 billion in consolidated revenue in 2025, driven largely by its Starlink satellite internet division, which posted $11.4 billion in revenue, growing nearly 50% year over year. Despite that growth, the company lost about $4.9 billion in 2025 and has burned through more than $37 billion since its founding.
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A significant portion of those losses trace back to xAI, Elon Musk’s artificial intelligence company, which was recently merged into SpaceX. SpaceX directed roughly 60% of its capital spending in 2025 to its AI division, totaling around $20 billion, yet that division lost billions and grew revenue by only about 22%.
SpaceX plans to list its Class A common stock on Nasdaq under the ticker SPCX, with Goldman Sachs, Morgan Stanley, and Bank of America leading the offering. The dual-class share structure means going public will not meaningfully reduce Musk’s control, as Class B shares he holds carry 10 votes per share compared to one vote for public Class A shares.
The company is targeting a raise of around $75 billion at a valuation of roughly $1.75 trillion, which would make it the largest IPO ever. The investor roadshow is reportedly planned for June 5.
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