

Investor's Corner
Tesla’s Gigafactory 3 is encouraging China’s local EV makers to be more competitive
Within the next few months, Tesla would begin exporting the Model 3 Performance and Long Range Model 3 AWD to the Chinese market. By the end of the year, the electric car maker aims to have the first Model 3 produced in Gigafactory 3, which will be equipped with both battery and electric car assembly lines.
There is a very good reason why the automotive industry is putting a lot of effort into saturating China. The country, after all, is the largest automobile market globally, both in terms of demand and supply. In 2017 alone, the country produced almost 25 million passenger cars and roughly 4 million commercial vehicles. The country is also a large market for electric vehicles, with sales of EVs hitting the 1 million mark in 2018, and estimates indicating that up to 2 million EVs could be sold in China by 2020.
Amidst this competitive car market lies Tesla and the upcoming Gigafactory 3. So far, Tesla’s electric cars — the Model S and Model X — have been competing in the Chinese market as higher-priced, premium alternatives to locally-made EVs. Tesla has been pretty successful in this sense, becoming a brand largely associated with status and quality, similar to other premium products such as the Apple iPhone. With Gigafactory 3, though, Tesla is stepping away from this strategy, as the facility is looking to produce the Model 3 and Model Y — affordable electric cars that can attack the much-larger, lower-end of the market.
While the presence of Tesla’s massive facility in Shanghai could result in more intense competition, though, some of the country’s local electric car companies have stated that they welcome the arrival of the Silicon Valley-based company nonetheless. In a statement to Xinhua News, Cui Dongshu, secretary general of the China Passenger Car Association, noted that the arrival of Gigafactory 3 would likely encourage local carmakers to step up their game. This, of course, benefits consumers.
“Tesla’s China production will have a ‘catfish effect’ in the country’s auto industry, pushing domestic carmakers to speed up their technological upgrading,” Cui said.
Jin Guoqing, deputy director of Chang’an Automobile, an automotive dynamics research institute, stated that his company would push its efforts even further now that Tesla has arrived in China, particularly as his firm targets a different price bracket and demographic compared to the American carmaker.
“We shall amplify our advantages to the most,” Jin said.
Legacy carmakers that are also attempting to breach the country’s lucrative and growing auto market are raising the stakes for their competition as well. Mercedes-Benz Parts Manufacturing & Service Ltd., for one, also inaugurated its first factory outside Europe last October. Just like Gigafactory 3, Mercedes-Benz’ factory is being built on the Lingang Area. BMW, on the other hand, also announced last October that it would be increasing its stake in BMW Brilliance Automotive, a joint venture located in in the northeastern city of Shenyang.
Ultimately, the arrival of Tesla’s Gigafactory 3 would likely boost the country’s electric car initiatives. Thus, apart from allowing Tesla to tap into what could very well be a lucrative market, Gigafactory 3 could also be the trigger that pushes even more innovation forward in the country. With vehicles such as the Model 3 and the Model Y saturating China, after all, competitors would be wise to come up with vehicles that are just as good or even better than Tesla’s electric cars.
Elon Musk, for his part, has expressed his high hopes for the facility. During an interview after the groundbreaking event, Musk stated that he has been very impressed with the construction capabilities of China so far. In his speech at the groundbreaking ceremony, Musk urged the country’s most driven workers to apply for a post in Gigafactory 3, even noting that maybe, just maybe, someone working in Gigafactory 3 could succeed him someday.
“I do want to emphasize that there’s no limit on the potential. One day, somebody could join us — a junior engineer here at Tesla Shanghai Gigafactory — and ultimately, maybe have my job someday,” Musk said.
Investor's Corner
Tesla could save $2.5B by replacing 10% of staff with Optimus: Morgan Stanley
Jonas assigned each robot a net present value (NPV) of $200,000.

Tesla’s (NASDAQ:TSLA) near-term outlook may be clouded by political controversies and regulatory headwinds, but Morgan Stanley analyst Adam Jonas sees a glimmer of opportunity for the electric vehicle maker.
In a new note, the Morgan Stanley analyst estimated that Tesla could save $2.5 billion by replacing just 10% of its workforce with its Optimus robots, assigning each robot a net present value (NPV) of $200,000.
Morgan Stanley highlights Optimus’ savings potential
Jonas highlighted the potential savings on Tesla’s workforce of 125,665 employees in his note, suggesting that the utilization of Optimus robots could significantly reduce labor costs. The analyst’s note arrived shortly after Tesla reported Q2 2025 deliveries of 384,122 vehicles, which came close to Morgan Stanley’s estimate and slightly under the consensus of 385,086.
“Tesla has 125,665 employees worldwide (year-end 2024). On our calculations, a 10% substitution to humanoid at approximately ($200k NPV/humanoid) could be worth approximately $2.5bn,” Jonas wrote, as noted by Street Insider.
Jonas also issued some caution on Tesla Energy, whose battery storage deployments were flat year over year at 9.6 GWh. Morgan Stanley had expected Tesla Energy to post battery storage deployments of 14 GWh in the second quarter.
Musk’s political ambitions
The backdrop to Jonas’ note included Elon Musk’s involvement in U.S. politics. The Tesla CEO recently floated the idea of launching a new political party, following a poll on X that showed support for the idea. Though a widely circulated FEC filing was labeled false by Musk, the CEO does seem intent on establishing a third political party in the United States.
Jonas cautioned that Musk’s political efforts could divert attention and resources from Tesla’s core operations, adding near-term pressure on TSLA stock. “We believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” Jonas stated.
Investor's Corner
Two Tesla bulls share differing insights on Elon Musk, the Board, and politics
Two noted Tesla bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

Two noted Tesla (NASDAQ:TSLA) bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.
While Wedbush analyst Dan Ives called on Tesla’s board to take concrete steps to ensure Musk remains focused on the EV maker, longtime Tesla supporter Cathie Wood of Ark Invest reaffirmed her confidence in the CEO and the company’s leadership.
Ives warns of distraction risk amid crucial growth phase
In a recent note, Ives stated that Tesla is at a critical point in its history, as the company is transitioning from an EV maker towards an entity that is more focused on autonomous driving and robotics. He then noted that the Board of Directors should “act now” and establish formal boundaries around Musk’s political activities, which could be a headwind on TSLA stock.
Ives laid out a three-point plan that he believes could ensure that the electric vehicle maker is led with proper leadership until the end of the decade. First off, the analyst noted that a new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” is necessary. He also stated that the Board should establish clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation, and a dedicated oversight committee must be formed to monitor the CEO’s political activities.
Ives, however, highlighted that Tesla should move forward with Musk at its helm. “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” he wrote, reiterating its Outperform rating on Tesla stock and $500 per share price target.
Tesla CEO Elon Musk has responded to Ives’ suggestions with a brief comment on X. “Shut up, Dan,” Musk wrote.
Cathie Wood reiterates trust in Musk and Tesla board
Meanwhile, Ark Investment Management founder Cathie Wood expressed little concern over Musk’s latest controversies. In an interview with Bloomberg Television, Wood said, “We do trust the board and the board’s instincts here and we stay out of politics.” She also noted that Ark has navigated Musk-related headlines since it first invested in Tesla.
Wood also pointed to Musk’s recent move to oversee Tesla’s sales operations in the U.S. and Europe as evidence of his renewed focus in the electric vehicle maker. “When he puts his mind on something, he usually gets the job done,” she said. “So I think he’s much less distracted now than he was, let’s say, in the White House 24/7,” she said.
TSLA stock is down roughly 25% year-to-date but has gained about 19% over the past 12 months, as noted in a StocksTwits report.
Investor's Corner
Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries
Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report.
Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.
Tesla’s Q2 results
Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.
In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.
Tesla’s stock is still volatile
Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump.
Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.
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