Investor's Corner
Tesla Gigafactory 3 seems to be preparing for the Model Y production ramp
There is a lot at stake riding in Tesla’s Gigafactory 3, the first facility of the electric car maker that would be established and operated in a foreign country. Giga 3 is set to be the first of Tesla’s next-generation Gigafactories as well, since the facility would be capable of producing both battery packs and electric cars on-site.
Tesla actually lucked out with Gigafactory 3, as it was able to secure a permit from the Chinese government to operate the facility without a local partner earlier this year. Tesla’s business license for the facility, which would be built in Shanghai, was granted to Tesla Motors Hong Kong Co., LLC, the electric car maker’s HK division, last May. The company also registered the capital for the Shanghai site at 100 million yuan, which corresponds to about $15.8 million. Interestingly, the initial filings of the company were absent of any references to battery production and electric car manufacturing.
That is, until now. A recent report from Sina Finance has noted that Tesla (Shanghai) Co., Ltd. recently registered a capital increase for its upcoming facility. The increase was significant, with the electric car maker now listing a capital of 4.67 billion yuan, which corresponds to about $680 million. Tesla Shanghai also revised its filings for the facility, mentioning references to battery separators, battery management systems, as well as electric car components such as powertrains and other electronic devices that are utilized in the company’s vehicles.
Tesla’s Gigafactory 3 would likely rival Gigafactory 1 in size once it’s completed, especially considering that the Shanghai-based facility will be producing both batteries and electric cars. Despite this, Elon Musk noted in the company’s Q2 2018 earnings call that Giga 3 would likely not cost as much as Gigafactory 1, which is expected to cost up to $5 billion once it’s complete. Musk’s initial estimate for Giga 3 is $2 billion, on account of optimizations that it learned from the Model 3 ramp.
“With respect to Gigafactory CapEx, I think we learned a tremendous amount with Gigafactory 1, and we’re confident that we can do the Gigafactory in China for a lot less. I think it’s probably closer to — this is just a guess, but probably closer to $2 billion, and that should be at a higher — and that would be sort of at the 250,000-vehicle per year rate. So I think we can be a lot more efficient with CapEx, and that would include at least a factory module and pack production, body shop, paint shop, and general assembly. Might even be less than that, but that’s about the right number for that,” Musk said.
A reporter from Beijing Business Daily noted that with the revised capital, around 30% of the funds are now ready for Tesla’s Shanghai Gigafactory. Perhaps even more notable were reports that the Shanghai government is assisting Tesla to obtain loans from Chinese banks to fund the construction of the facility.
It should be noted that Gigafactory 3 does not need to be fully completed before the facility could start building battery packs and electric cars. Gigafactory 1, for example, is less than 30% complete, but it is already supporting the demand for battery packs and powertrains from the Model 3 production ramp. The Model 3’s current production pace is no joke, either, as the company is reportedly on track to building at least 50,000 Model 3 this quarter.
With this in mind, Tesla only needs to get critical portions of Gigafactory 3 working before the facility could start producing vehicles. Such a strategy actually taps into a particularly impressive expertise of the country’s workforce, considering that China’s builders are proficient in quickly constructing modular structures. This type of construction was showcased by the country’s workforce when it completed the construction of a 57-story skyscraper in just 19 days back in 2015. If Tesla opts to adopt a similar construction method for Gigafactory 3, the facility could come alive well in time for the production of the company’s next big vehicle — the Tesla Model Y.
Elon Musk has noted that the Model Y would likely be built sometime next year. Being a crossover SUV, the Model Y would compete in one of the auto industry’s most competitive markets. The Model Y is expected to have a demand of up to 1 million vehicles per year, making it even more popular than the Model 3. Tesla has been quite tight-lipped about the facility where the Model Y would be constructed. Considering Tesla’s updates with Gigafactory 3, as well as Elon Musk’s past statements about the Model Y being built in China; there is a good chance that Giga 3’s vehicle production lines would likely be designed for the electric crossover.
Back in July, Tesla noted that it expects Gigafactory 3’s vehicle production to start roughly two years after construction begins. In true Tesla fashion, the company intends to ramp the facility’s production rate to 500,000 vehicles per year within 2-3 years. This aggressive timeline has been met by doubts in the United States, with Consumer Edge Research senior auto analyst James Albertine dubbing the company’s targets as “not feasible.” Fortunately for Tesla, its is a company that operates best when it is proving its skeptics wrong.
Investor's Corner
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
Will Tesla thrive without the EV tax credit? Five reasons why they might
Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
Tesla begins Holiday Update rollout with some surprise features
