News
Tesla’s China-made Model 3 will be a cash cow for the automaker as margins set to improve even more
A new report by equity research firm suggests that Tesla’s gross margin for Made-in-China (MIC) Model 3 could increase to 40 percent or even higher, and with higher profit margins, the electric car manufacturer can create the conditions that will further help stimulate sales in the country.
The report published by China-based equity firm Chuancai Securities and shared with Teslarati by Tesla Model S/X owner and Twitter user Ray4Tesla, says that parts domestication will be key to achieve higher profit margins with the MIC Model 3.
A Chinese research paper I was reading shows the gross margin for MIC #Model3 is as high as 35% vs 20% for US-made Model 3s. Production efficiency will further improve margins. pic.twitter.com/gXGdzg7WjF
— Ray (@ray4tesla) January 15, 2020
“We assume that depending on the progress of Tesla’s parts domestication, the cost of raw materials will fall by 10%-20%. In this case, gross profit margin of Model 3 produced by the Chinese factory will reach more than 35%, which is much higher than the American factory by about 20% gross profit level,” the report reads. In October 2018, Tesla said that its Model 3 gross margins were more than 20 percent but this was adjusted when it decided to drop the price of the electric sedan to make it accessible to more US buyers.
-->The report also estimates that after the localization of parts, Tesla’s expenses for raw materials for the China-made Model 3 will drop by 10 to 20 percent. It also takes note of cheaper manufacturing costs and labor costs. Taking into account all of these factors, the researchers concluded that the total production cost may fall by 20-28 percent and thereby further improving profit margin.
This new report from China practically says that the MIC Model 3 has the potential to be its cash cow — read: high volume sales and higher profit margins. This is aside from the fact that Tesla CEO Elon Musk has also formally launched the Model Y program in the country during the event for the first public deliveries of the company’s mass-produced electric sedans. According to the report, buyers of the affordable SUV in the country might still enjoy preferential purchase tax, from which its smaller sibling was also exempted from.
Tesla has the potential to claim China, the biggest automotive market in the world, to be its strong foothold. If that happens, it can boost the possibility of sustained profitability for the brand that Musk wants to achieve.
With Musk planning to create an engineering and design center in China, it will not be a surprise if the Gigafactory 3 will play a key role in conquering potential markets in Asia and in pushing for the growth of the brand int its existing markets in the region.
The analysis of the researchers is consistent with earlier rumors that Tesla can further lower the price of the Model 3 once it sources parts, including expensive parts such as its battery, from local suppliers. For now, Tesla has lowered the price of the Model 3 in China to around $42,919 from the original price tag $50,000 as the new year kicked off, a move that practically undercut other brands such as BMW and Mercedes that offer vehicles in the same segment and the electric car manufacturer surely sparked more interest as showrooms in the country were filled with potential buyers.
-->At present, Tesla’s Gigafactory 3 in Shanghai already has a run rate of 3,000 units per week and plans to hit that production goal as more workers are added to the frontline.
News
Tesla’s new Holiday perk is timed perfectly to make FSD a household name
Tesla AI4 owners get FSD (Supervised) through Christmas, New Year’s Eve and well into the post-holiday travel season.
Tesla quietly rolled out a free Full Self-Driving (Supervised) trial for roughly 1.5 million HW4 owners in North America who never bought the package, and the timing could very well be genius.
As it turns out, the trial doesn’t end after 30 days. Instead, it expires January 8, 2026, meaning owners get FSD (Supervised) through Christmas, New Year’s Eve and well into the post-holiday travel season. This extended window positions the feature for maximum word-of-mouth exposure.
A clever holiday gift
Tesla watcher Sawyer Merritt first spotted the detail after multiple owners shared screenshots showing the trial expiring on January 8. He confirmed with affected users that none had active FSD subscriptions before the rollout. He also observed that Tesla never called the promotion a “30-day trial,” as the in-car message simply reads “You’re Getting FSD (Supervised) For the Holidays,” which technically runs until after the new year.
The roughly 40-day period covers peak family travel and gatherings, giving owners ample opportunity to showcase the latest FSD V14’s capabilities on highway trips, crowded parking lots and neighborhood drives. With relatives riding along, hands-off highway driving and automatic lane changes could become instant conversation starters.
Rave reviews for FSD V14 highlight demo potential
FSD has been receiving positive reviews from users as of late. Following the release of FSD v14.2.1, numerous owners praised the update for its smoothness and reliability. Tesla owner @LactoseLunatic called it a “huge leap forward from version 14.1.4,” praising extreme smoothness, snappy lane changes and assertive yet safe behavior that allows relaxed monitoring.
-->Another Tesla owner, @DevinOlsenn, drove 600 km without disengagements, noting his wife now defaults to FSD for daily use due to its refined feel. Sawyer Merritt also tested FSD V14.2.1 in snow on unplowed New Hampshire roads, and the system stayed extra cautious without hesitation. Longtime FSD tester Chuck Cook highlighted improved sign recognition in school zones, showing better dynamic awareness. These reports of fewer interventions and a more “sentient” drive could turn family passengers into advocates, fueling subscriptions come January.
Elon Musk
Elon Musk predicts AI and robotics could make work “optional” within 20 years
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Elon Musk stated that rapid advances in artificial intelligence and robotics could make traditional work unnecessary within two decades.
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Work as a “hobby”
During the discussion, Musk said the accelerating capability of AI systems and general-purpose robots will eventually cover all essential tasks, making human labor a choice rather than an economic requirement. “In less than 20 years, working will be optional. Working at all will be optional. Like a hobby,” Musk said.
When Kamath asked whether this future is driven by massive productivity growth, Musk agreed, noting that people will still be free to work if they enjoy the routine or the challenge. He compared future employment to home gardening, as it is something people can still do for personal satisfaction even if buying food from a store is far easier.
“Optional” work in the future
Elon Musk acknowledged the boldness of his claim and joked that people might look back in 20 years and say he was wrong. That being said, the CEO noted that such a scenario could even happen sooner than his prediction, at least if one were to consider the pace of the advancements in AI and robotics.
-->“Obviously people can play this back in 20 years and say, ‘Look, Elon made this ridiculous prediction and it’s not true,’ but I think it will turn out to be true, that in less than 20 years, maybe even as little as ten or 15 years, the advancements in AI and robotics will bring us to the point where working is optional,” Musk said.
Elon Musk’s comments echo his previous sentiments at Tesla’s 2025 Annual Shareholder Meeting, where he noted that Optimus could ultimately eliminate poverty. He also noted that robots like Optimus could eventually provide people worldwide with the best medical care.
Elon Musk
Elon Musk reiterates why Tesla will never make an electric motorcycle
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more.
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more, highlighting that the electric vehicle maker has no plans to enter the electric motorcycle market.
Musk posted his clarification in a post on X.
Musk’s reply to a fun AI video
X user @Moandbhr posted an AI video featuring the Tesla CEO on the social media platform, captioning it with “Mr. Elon Musk Just Revealed the Game-Changing Tesla Motorcycle.” The short clip depicted Musk approaching a sleek, single-wheeled vehicle, stepping onto it, and gliding off into the distance amid cheers. The fun video received a lot of traction on X, gaining 3.1 million views as of writing.
Musk replied to the post, stating that a Tesla motorcycle is not going to happen. “Never happening, as we can’t make motorcycles safe. For Community Notes, my near death experience was on a road bike. Dirt bikes are safe if you ride carefully, as you can’t be smashed by a truck,” Musk wrote in his reply.
Musk’s Past Comments on Two-Wheelers
Musk also detailed his reservations about motorcycles in a December 2019 X post while responding to questions about Tesla’s potential ATV. At the time, he responded positively to an electric ATV, though he also opposed the idea of a Tesla road-going motorcycle. Musk did state that electric dirt bikes might be cool, since they do not operate in areas where large vehicles like Class 8 trucks are present.
-->“Electric dirt bikes would be cool too. We won’t do road bikes, as too dangerous. I was hit by a truck & almost died on one when I was 17,” Musk wrote in his post.
Considering Musk’s comments about dirt bikes, however, perhaps Tesla would eventually offer a road bike as a recreational vehicle. Such a two-wheeler would be a good fit for the Cybertruck, as well as future products like the Robovan, which could be converted into an RV.
Tesla’s new Holiday perk is timed perfectly to make FSD a household name
Elon Musk predicts AI and robotics could make work “optional” within 20 years
