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Tesla’s impending made-in-China Model 3 assault should scare critics

(Photo: Tesla)

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Earlier today, Tesla stock (NASDAQ:TSLA) received yet another negative outlook from Wall Street. This time around, it was Barclays analyst Brian Johnson, who reduced his price target for TSLA to a very conservative $133 per share. According to the analyst, his low price target is due to demand for the Model 3 stagnating in the United States and the company lacking a path to significant profitability.

Such a conclusion, which is likely driven by Tesla’s lower-than-expected numbers in the first quarter, is shortsighted at best and flat-out inaccurate at worst. There is an elephant in the room with all the negativity surrounding Tesla’s capability to survive and thrive this year, and it comes in the form of a gargantuan factory whose shell was all but completed in the span of five months in Shanghai. Tesla is poised to start producing the Model 3 at Gigafactory 3 later this year, and this development could shift the winds back in the electric car maker’s favor.

The potential of Gigafactory 3 or the advantages it could give Tesla has been strangely absent in a notable number of critical analysis surrounding the electric car maker as of late. Considering the negative narrative surrounding Tesla and Elon Musk today, this is no surprise. Tesla critics appear to have largely dismissed Gigafactory 3’s progress, as exhibited by skeptics describing the site mostly as a pile of dirt with some digging going on (videos of which are still being distributed today). Such statements have not been accurate since work took off in the Gigafactory 3 site.

Gigafactory 3 as of May 26, 2019. (Credit: Jason Yang/YouTube)

Refusing to acknowledge Gigafactory 3’s impending operations, or discounting its capability to help Tesla’s numbers, could be a grave mistake for the company’s critics. Industry experts that actually deal with China on a regular basis, after all, have expressed their belief that Model 3s produced in Gigafactory 3 will be no joke. Take Michael Dunne, the CEO of consultancy firm ZoZo Go, for example. In a recent appearance at Autoline This Week, Dunne noted that Gigafactory 3’s presence would most definitely be a difference maker for Tesla.

“(They’re the) first foreign company to be allowed to own 100% of their operation. They’re in Shanghai. Shanghai will want to make sure they’re a success. The government will make sure that they’ve got their plant built in time and they have everything working. And on top of it all, Chinese consumers really do like the Tesla brand and really admire Elon Musk. So you’ve got a premium market — 2 million units a year — you have the government wanting electrics to succeed, and you’ve got a very strong American brand. So they’d be one to bet on,” Dunne said.

Dunne’s points are largely missed by the persistent “no demand” narrative surrounding Tesla in the United States today. It should be noted that Dunne holds a notable amount of experience with China’s automotive sector, as well, making him an authority on the subject. And it’s not just Dunne either. Automotive teardown expert Sandy Munro, who quite literally analyzed every nut and bolt in the Model 3, previously noted that Elon Musk could make a “gazillion bucks” in China if Tesla sets up Gigafactory 3’s production systems right. “I guarantee it,” Munro said during an appearance at Autoline After Hours. Munro later remarked that a Standard Model 3 produced in Gigafactory 3 could generate 25% gross margins for Tesla.

Tesla is poised to start producing the Model 3 at Gigafactory 3 later this year. (Credit: Vincent Yu/Twitter)

If there are any valid concerns about Tesla’s Gigafactory 3 operations, it would be on the electric car maker’s capability to set up the facility on time for its target initial vehicle production date, not on the market’s demand for the vehicle. Contrary to what analysts such as Morgan Stanley’s Adam Jonas have noted (Jonas recently pointed out during an investor call that Tesla is no longer a growth story, and that it is more of a “distressed credit and restructuring story”), it appears that there is still much growth left for the company. It’s just not happening in the United States at present. Between the statements of the Morgan Stanley analyst, who likely looks at the company’s short-term numbers, and Michael Dunne, who is immersed in China’s automotive sector by trade, one would likely be inclined to believe the latter.

Just as Tesla stock experienced a steep drop due to a perfect storm of lower-than-expected Q1 deliveries, negative analyst sentiments, misinformation, and sheer bad luck (such as the company’s delivery troubles in China during the first quarter), the electric car maker might be poised to experience yet another perfect storm with the impending completion of Gigafactory 3. With the Chinese government rooting for its success, and with customers in the country still perceiving the company and its vehicles in a positive light, the electric car maker’s made-in-China Model 3 push might prove once more that it is never wise to underestimate Tesla, and Elon Musk for that matter.

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Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Elon Musk breaks his silence on the Starlink impact to Ukraine drones

Musk says the US military and president set Starshield limits, not SpaceX, amid Ukraine complaints.

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Elon Musk says the speed limit cutting out Ukraine’s military Starlink terminals is not SpaceX’s decision. In a post on X Wednesday, Musk wrote that “Starshield systems are owned and controlled by the US government. Any limits on speed or usage are decided by the US military and ultimately POTUS.” He added that Starlink is a commercial service limited to civilian or defensive activities and “cannot be used for offensive military action, as doing so would be inappropriate for a commercial company.”

He was replying to Mykhailo Fedorov, Ukraine’s former defense minister, who had thanked Musk for restoring connectivity at speeds up to 160 km/h and said removing the Starshield limit entirely is “now critical for Ukraine’s defense.”

The complaint started Tuesday night, when Ukrainian officials said military terminals began losing service above roughly 100 mph. Presidential adviser Serhiy Beskrestnov said the defense forces got no warning and several missions were disrupted, as Teslarati reported earlier Wednesday. The 7th Rapid Reaction Corps told Reuters connections dropped for 10 to 20 seconds at speeds well below the limit, which made drones harder to control. Poland’s foreign minister, Radoslaw Sikorski, asked Musk on X whether he is “playing politics with your products again.”

That is why the Starlink and Starshield distinction matters. SpaceX introduced Starshield in 2022 as the government version of Starlink, with an initial focus on Earth observation, communications and hosted payloads. It won a Space Force contract in 2023 with a $70 million ceiling. In December 2024, the Pentagon moved Ukraine’s terminals onto Starshield, covering about 3,000 units across two contracts. Ukraine’s military connections therefore run through a service that Musk now says sits under Washington’s control.

SpaceX pitches subscription model for Trump’s Golden Dome

While Musk’s post describes who holds authority, it does not infer that anyone ordered the limit, and neither SpaceX nor the US government has confirmed who set it. Ukrainian officials have pointed to the timing, which follows President Trump’s push for an energy ceasefire and Musk’s Saturday post that “Zelensky has gone too far.” The BBC noted Trump denied threatening to restrict intelligence sharing with Kyiv, and no evidence has been presented that Washington requested the cap.

The episode also revives a promise from 2025. After Poland accused him of threatening Ukraine’s access, Musk said Starlink “will never turn off its terminals” and would not be used as a bargaining chip. Poland has since supplied more than 29,000 terminals to Ukraine. Teslarati also covered Kyiv’s search for Starlink alternatives in 2025, and the latest dispute gives that search new urgency.

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Investor's Corner

Tesla opens the Q&A for its biggest earnings call yet

Tesla opens its Q3 earnings Q&A, and Cybercab, Robotaxi, Optimus and regulators loom over October 21.

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Tesla has opened its shareholder question portal for the Q3 2026 earnings call, with the Say Q&A page already listing questions. Investors have until 4:00 p.m. EDT on October 20 to submit and vote on what management should answer.

The call is set for Wednesday, October 21. Tesla will post results after the market closes, with a live webcast at 4:30 p.m. CT, or 5:30 p.m. ET, through its investor relations site.

Say ranks questions by the number of shares behind the votes, which gives institutional holders extra weight over the retail crowd.

Ahead of Q2, retail investors asked why Robotaxi growth had stalled, when Cybercab would start customer rides, and where the Optimus Gen 3 ramp stood, while an institutional holder asked how Tesla and SpaceX would split Terafab duties. Cybercab has since answered one of those. Tesla said last week it has 300 plus Cybercabs serving Austin, up eightfold in 30 days, with Dallas named as the next city. The questions now are likely to move from when to how fast.

There is also a regulatory question hanging over the call. NHTSA has demanded sworn answers on how the pedal free Cybercab was certified against federal safety standards, with responses due October 30, nine days after the call. Whether an analyst raises it live is unknown, but it is the kind of exposure that tends to find its way into a Q&A.

The numbers will not be the main draw. Tesla already reported 486,532 deliveries and 13.7 GWh of storage for the quarter. Consensus sits around 43 to 45 cents per share on roughly $27.8 billion in revenue, according to Zacks, after a Q2 report that missed on EPS. Goldman Sachs, which holds a Neutral rating and a $360 target, argues the outlook for Robotaxi, FSD and Optimus will matter more to the stock than the quarter itself.

The call also lands six days after the rescheduled Roadster event, which Tesla will stream on X on Thursday, October 15, at 7:55 p.m. CT. If the Roadster shows up with a production date or a SpaceX thruster package, expect it to climb the voting list before the deadline.

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FAA kicks off review of SpaceX’s bid to fly Starship nearly every day

FAA is reviewing SpaceX’s plan for 456 Starship launches a year, up from 25 today.

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Rendering of Elon Musk overlooking a Starship fleet (Credit: Grok)

The FAA said Tuesday that it will prepare an environmental impact statement on SpaceX’s proposal to run as many as 456 Starship launches and 912 landings a year from Starbase, Texas. SpaceX is currently authorized for 25 launches and 50 landings annually, which makes the request roughly 18 times the existing ceiling. The notice of intent is set to publish in the Federal Register on Wednesday.

The plan comes in two phases. Phase 1 would allow up to 100 launches and 200 landings a year, on any day and at any hour. Phase 2, which the FAA says could arrive within several years, would raise the limit to the full 456 launches, still at any hour but only on weekdays. The agency noted that 912 landings is the upper limit for the Texas facility no matter where a given mission begins, and that Starship and Super Heavy could come down at the launch site or in the Gulf and open ocean.

A draft statement will be released for public comment at a later date, and the FAA has not said when. According to the Federal Registar, written comments are due November 30 on regulations.gov under docket FAA-2026-12808, with in person scoping meetings on November 17 in Brownsville and November 19 in Port Isabel, plus a virtual session on November 18. The review will weigh air quality, wildlife, coastal resources, water, noise, and aviation, and the FAA said any increase beyond this proposal would need its own separate review.

The numbers look large next to what Starbase has actually done. Starship has flown three times from Texas this year, including Flight 14 on September 28, the first orbital flight, which deployed 26 Starlink V3 satellites. Bloomberg reported that Starbase has never launched more than five times in a calendar year. The current cap of 25 comes from an FAA approval in May 2025. In February, the agency also approved up to 44 Starship launches a year from Launch Complex 39A in Florida, so Phase 1 in Texas alone would more than double that allowance.

Musk has said Starship could eventually fly more than once per hour within less than a decade, per Bloomberg. The nearer term target is Flight 15. Musk said on October 10 that it is hopefully four to six weeks away and will try to catch the ship with the tower, as Teslarati covered. That flight still runs under the existing 25 launch limit, and so would every Starbase launch for as long as the new review takes.

As of mid morning Pacific time on Tuesday, SpaceX had not posted about the filing on its own account.

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