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
Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit
Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.
Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.
Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.
Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.
The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”
Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”
The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.
Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.
Elon Musk
SpaceX President to gift Trump Accounts her SpaceX stock
Gwynne Shotwell’s 2 million SpaceX shares are headed to children’s Trump Accounts starting this December.
SpaceX President Gwynne Shotwell said Friday that more than 2 million SpaceX shares belonging to her and her husband, Robert, will be distributed to children’s Trump Accounts in December, turning a pledge she made over the summer into an actual transfer. “Robert and I are thrilled that our gift of over 2 million shares of SpaceX stock will be distributed to children’s Trump accounts in December!” Shotwell wrote on X, adding that the shares are “transferring to escrow as we speak.”
The first round goes to children aged 11 to 17 who live in ZIP codes where the median family income is $57,000 or less, along with kids in ZIP codes with too few residents for the Census to report that figure. Shotwell said those families should receive a notice by Monday, Reuters reported.
A second gift is expected to be finalized in the next few weeks. That round will cover eligible children in military families serving overseas, children in foster care, and more kids in Texas counties near the Shotwells’ home where median family income is $90,000 or less. Elon Musk replied to the announcement with “Cool” and a heart emoji.
Shotwell first announced the donation on July 6, less than a month after SpaceX priced its record IPO at $135 per share on the Nasdaq. IPO filings showed Shotwell owned about 12.6 million SpaceX shares, Quartz reported at the time, which makes the gift roughly one sixth of her stake. At the roughly $146 per share used to value Musk’s own pledge earlier this month, 2 million shares are worth about $290 million.
How the stock would actually reach the accounts had been an open question since July. Treasury guidance acknowledged that stock donations could flow into Trump Accounts, but it did not explain the mechanics for a program whose contributions default into an S&P 500 index fund. Shotwell thanked the Treasury, the IRS, the Dell Foundation, Greater Horizons, Invest America and the law firms Morgan Lewis and Gibson Dunn for “working over the past few months to make this happen.”
The transfer also works as a dry run for a far larger gift. On October 19, Musk said he would give one of his SpaceX shares to every kid in America next year and called it “the first of many.” With roughly 72 million children in the country, that pledge is worth about $10.5 billion. President Donald Trump thanked Musk the same day and said the shares would go through Trump Accounts, though neither SpaceX nor the Treasury has published how or when that distribution will happen.
Shotwell’s recipients also fill a gap in the program itself. Trump Accounts launched on July 4, and the $1,000 Treasury deposit only goes to babies born between 2025 and 2028. Teenagers aged 11 to 17 receive no government seed money, so for many of the families getting a notice on Monday, SpaceX stock will be the first asset in the account. The accounts convert into retirement accounts when the child turns 18.
Investor's Corner
Tesla has a Cybercab problem nobody saw coming
Tesla’s Cybercab line now builds robotaxis faster than Tesla can deploy them, Lars Moravy says.
Tesla’s Cybercab line in Texas can now build the two seat robotaxi faster than the company can put it into service, according to Lars Moravy, Tesla’s Vice President of Vehicle Engineering. “We don’t run every day because the line can run so fast. It’s currently outpacing our deployments,” Moravy said in a new Cybercab deep dive from Munro Live. “So, it’s a bit of a race right now. Who’s going to go faster? Right now the manufacturing line’s ahead.”
Tesla’s official Robotaxi account shared a Cybercab analysis video on X on Monday, calling it a “Cybercab engineering deep dive.” Moravy’s comments go further than what he told analysts on the Q3 earnings call last week, when he said the Cybercab line’s listed capacity of more than 125,000 units a year undersells what it can actually run.
The tour shows where that speed comes from. Tesla’s unboxed process splits the Cybercab into front, rear, side and center modules that are built and tested on their own before they meet on a short final line. That final line has just 25 fully automated stations, which Tesla’s team estimated is a fifth to a tenth of what a Model Y needs. The full line is about 78% automated, the framing line is already at 100%, and the layout uses roughly 50% less floor space per vehicle. The stated goal is “100% automation in 10 second cycle time,” or one finished Cybercab every 10 seconds.
Tesla also deleted the paint shop. Only the side modules are coated, and the exterior panels get their color inside the molding machine. Engineers said the car is designed to run at least 500,000 miles, which matters for a vehicle that will spend most of its day carrying riders.
The battery got the same treatment. The Cybercab uses an 88S6P pack of 4680 cells in a steel enclosure, a first for Tesla, with each module potted separately so a single failed module can be swapped instead of the whole pack. Wireless battery management boards replace a wiring harness, and new contactors are fast enough to drop the pyro fuse entirely. Tesla’s battery director graded the pack an A minus, compared with a D for the Model Y structural pack and a B minus for Cybertruck. Up front, the drive unit runs an 11:1 gear ratio versus roughly 9:1 on most Teslas, since the Cybercab does not need a high top speed.
Cybercab engineering deep dive — Robotaxi (@robotaxi) October 26, 2026
The deployment side is now the bottleneck Moravy described. Tesla had more than 50 Cybercabs working the Formula 1 weekend in Austin, and Texas records show 463 Cybercabs registered. Tesla said on its earnings call that Cybercab service will launch in Dallas next month, and Moravy said the company is aiming to get Cybercabs to customers by the end of 2026. Every unit built so far has gone into Tesla’s own fleet since the line moved into volume production in April.
Munro Live also asked when it could get a Cybercab to tear down. Tesla’s answer: “Not yet.”
Tesla owners who tap Emergency Drive Away for fun are in for a surprise
Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit
