Investor's Corner
Tesla’s impending made-in-China Model 3 assault should scare critics
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.
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.
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.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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SpaceX stock did the opposite of what most of Wall Street expected this week, when the day designed to be its most dangerous turned into a rally, and the rally kept going.
Thursday marked the first major lockup expiration since SpaceX’s June IPO, making roughly 911.5 million insider held shares eligible to trade for the first time, more than doubling the company’s public float. Analysts and short sellers had spent weeks bracing for a flood of selling, especially after the stock fell 13 percent following its first earnings report as a public company on Tuesday. Instead, shares rose 6.1 percent Thursday to close at $114.92, and by Friday they were trading near $129, up more than another 12 percent on the day.
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
The setup made the outcome notable. Short interest had climbed to roughly 34 percent of the float heading into earnings, among the highest of any large cap stock, with about 95 percent of available shares to borrow already on loan. CEO Elon Musk warned short sellers twice in the weeks before the lockup, writing on X that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” then following up on the morning of earnings with “I try to warn them, but they just double down.”
When the newly unlocked shares hit the market and the selloff never showed up, some of that short position appears to have started unwinding. TipRanks reported that options activity shifted toward bullish strategies like put selling and risk reversals following the rally, with roughly $600 million in options premium trading Thursday alone. Retail buyers also stepped in during the earnings dip, according to Vanda Research.
The fundamentals behind the stock have not changed much in a week. SpaceX’s revenue nearly doubled year over year to $7.8 billion, with Starlink subscribers doubling to 12 million and the company’s AI segment growing 247 percent. What spooked investors on Tuesday was the spending side. Capital expenditures jumped to more than $18 billion for the quarter, up from $2.8 billion a year earlier, with AI investment alone rising from $749 million to $15.8 billion. Wall Street remains split on whether that spending is building infrastructure SpaceX needs or outrunning what the business can currently support, a debate Teslarati has tracked since shares first came under pressure.
None of that resolves the bigger question hanging over the stock. Thursday’s release was only the first of nine staggered lockup tranches, with roughly $800 billion worth of additional shares scheduled to become eligible through October, and Musk’s own stake stays locked until next June. If this week is any indication, the market is treating that supply as something it can absorb rather than something to fear, at least for now.
Cybertruck
Tesla Cybertruck production snaps back after ugly supplier fight
Cybertrucks are piling up again at Giga Texas after Tesla’s court win against a parts supplier.
Cybertruck production at Giga Texas is showing its first visible recovery since Tesla sued a supplier last month over withheld manufacturing tooling.
Aerial observer Joe Tegtmeyer flew over the Austin factory Wednesday morning and counted roughly 100 or more Cybertrucks filling the outbound lot, a sharp jump from the thin numbers seen in recent weeks. The flyover came a day after a judge granted Tesla a temporary restraining order against Angstrom Automotive Group, the parts supplier at the center of the dispute.
Tesla filed an emergency lawsuit in late July after Angstrom told the automaker it planned to close the Troy, Texas facility where Tesla’s die-cast tools, trim dies and other Cybertruck stamping equipment were housed. According to Tesla’s complaint, a shipment of 700 finished parts never left the building, and when Tesla sent representatives to retrieve its equipment, accompanied by law enforcement, they were turned away. Angstrom allegedly then asked for an extra $250,000 a week to keep operating, which Tesla’s filing described as holding its own property for ransom.
TESLA: U.S. District Judge Christopher R. Wolfe of the U.S. District Court for the Western District of Texas, Waco Division granted Tesla a Temporary Restraining Order and Writ of Replevin in its dispute with Angstrom Automotive (Case No. 6:26-cv-00477).
The order authorizes… https://t.co/E1DKcQSxMn pic.twitter.com/LR8aAiV2Og
— S.E. Robinson, Jr. (@SERobinsonJr) August 5, 2026
The restraining order gives Tesla immediate right of entry to Angstrom’s facility to recover the tooling. It is temporary, with a fuller hearing still to come, but the speed of Wednesday’s rebound suggests the Angstrom shortage was indeed the main bottleneck limiting Cybertruck output. Outbound lot counts are an imperfect measure of actual production, since finished trucks can sit for days before shipping, but a lot that full after a lean stretch is a meaningful signal.
Cybertruck output at Giga Texas has fluctuated all year as Tesla worked through supply issues and introduced new trims, including a cheaper Dual Motor AWD version that drew strong early demand.
Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
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