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 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 (NASDAQ: TSLA) reported its earnings for the third quarter of 2026, marking a reasonable performance on the various financial metrics. Tesla still plans to hold a call that will field investor questions at 5:30 p.m. ET, 4:30 p.m. CT.
Here’s where Earnings came in:
- Total Revenues: $28.046 reported vs. $28.34B expected
- Non-GAAP EPS: $0.48 reported vs. $0.45 expected
- Operating Margin: 2.6 % reported vs. 2.5% expected
- Operating Income: $718M reported vs. $721M expected
- Free Cash Flow: $1.531B reported vs. ~-$4.51B expected
Tesla $TSLA Earnings Results:
Revenues: $28.046B
Non-GAAP EPS: $0.48
Operating Margin: 2.6%
Operating Income: $718M
FCF: $1.531B— TESLARATI (@Teslarati) October 21, 2026
Major Takeaways
Full Self-Driving (Supervised)
“FSD (Supervised)⁴ attach rate continued to grow, reaching over 75% of new vehicle deliveries in North America – our most mature market – a nearly twenty percentage point sequential increase. We believe that FSD is driving demand in markets where it is available, and we continue to work with regulators to get it approved in other markets.”
Tesla Semi
“We began volume production of Tesla Semi, our Class 8 heavy-duty truck. The top variant can go 500 miles at full 82,000 lbs gross combination weight while achieving an efficiency of 1.7 kWh/mile. That efficiency allows the Tesla Semi to use a third of the energy used by a comparable diesel truck to haul the same payload. In a transportation market where energy is one of the largest components of total cost per mile, this will provide a meaningful advantage to Tesla Semi operators.”
SI Compute
“We plan to reach 400 MW of SI training compute by the end of the year, supporting the development of both vehicle and humanoid robot autonomy software. Additionally, we continued construction for the Austin Fab, where we plan to start commissioning equipment in 2027.”
Robotaxi
“We began deployment of Cybercab into our Robotaxi fleet in Austin. We reached nearly two million cumulative unsupervised miles for our Robotaxi service as of the end of the quarter. Operating hours in Austin are now 6am to midnight, and we expect to reduce wait times via increased fleet supply and improvement of Robotaxi orchestration algorithms. Grok is available in Cybercab with access to Grok Bot and Connectors, which allows users to manage their inbox, calendars, files, chats and tasks – all hands free via voice command – making Cybercab a mode of transport, a productivity space and, with our entertainment options, a second living room.”
Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.
Tesla (NASDAQ: TSLA) reports its earnings for Q3 today. Here’s what to expect, as the company will reveal its balance sheet after the market closes on Wednesday.
Tesla already reported deliveries just after Q3 ended, and it demolished Wall Street consensus estimates of roughly 462,000 vehicles. Tesla delivered 486,532 cars in the third quarter, which was a big beat, but was down 2.1 percent from the same quarter last year. Energy storage deployments were 13.7 GWh, up year-over-year.
Tesla showrooms picked clean ahead of Q3 end as demand looks strong
For the quarter, analysts have already compiled their predictions for what Tesla will report this afternoon:
- Total Revenues: $28.34B
- Non-GAAP EPS: $0.43
- Operating Margin: 2.5%
- Operating Income: $721M
- Free Cash Flow: ~-$4.51B
Here are a few things we are looking forward to hearing about on the call:
Automotive Gross Margin and Overall Profitability
This was 16.3 percent in Q2, down from 19.2 percent in Q1, and was impacted by warranty charges and some fading regulatory credits. Consensus implies overall gross margin near 18 percent, but a miss here would potentially reinforce concerns about pricing pressure on its vehicles.
Pay attention to energy storage margins as well, especially since Tesla missed GWh expectations, although it was still a strong quarter.
Robotaxi/Cybercab, Unsupervised FSD, and Optimus Progress
The Say questions from retail investors usually focus on these types of projects, and this quarter is no different. Scaling the Cybercab fleet beyond Austin amid the open NHTSA safety review, timeline for Unsupervised FSD in customer cars, Robotaxi unit economics, and Optimus cost per unit plus when it could start generating revenue, are all things to be looking for.
Any concrete timelines or regulatory path details will likely move the stock more than the near-term numbers. SpaceX merger speculation, which was detailed during SpaceX’s earnings call last night, may also surface, although the key details were shared last night.
Elon Musk just confirmed the Tesla and SpaceX merger step everyone was waiting for
Say Investor Questions
- How does the Cybercab fleet scale past Austin, and what’s the regulatory path outside Texas given NHTSA’s open safety review?
- When can we anticipate FSD unsupervised in customer cars?
- When will the CyberCab be available for customer purchase/ownership?
- What’s the unit economics per paid robotaxi mile, and how does it compare to the thirty-cent target?
- Tesla has acknowledged that HW3 vehicles cannot support unsupervised FSD. When will owners know whether they can upgrade their hardware for free, and when will Tesla provide a clear plan?
The full Earnings Call will be streamed this evening after market close around 5 p.m. this evening.
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