Investor's Corner
Tesla seems to be preparing the Model 3 for a 6,000/week production push
As Tesla heads towards its Q2 2018 financial results and earnings call, the electric car maker seems to be showing signs that it is gearing up for yet another significant Model 3 production push.
In an interview with Bloomberg Businessweek earlier this month, Elon Musk described the Model 3 ramp as a “bet-the-company” situation — a scenario in which the vehicle’s failure would equate to Tesla’s likely collapse. It was a risky gamble, and it gave Musk what he called “permanent mental scar tissue,” but with the company’s milestone at the end of Q2 2018, when it managed to produce 5,000 Model 3 per week, the end of Tesla’s manufacturing hell appears to be within reach.
To fully get out of production hell, Tesla would need to manufacture the Model 3 at scale and at a sustainable rate — a feat that has proven incredibly challenging for the electric car maker. Over the first half of July, signs were abounding that Tesla was once more defying the odds and maintaining its optimum manufacturing rate for the electric car, with mass sightings of Model 3 being transported, test drives for the vehicle being offered, and mass VIN registrations numbering more than 19,000 being filed in a two-week period. If Bloomberg‘s ever-evolving Model 3 tracker is any indication, however, Tesla’s production rate for the electric car appears to have tapered down recently.
While the recent production drop suggested in Bloomberg‘s tracker might appear negative, the publication’s model also forecasts an upcoming spike in Model 3 production. As of writing, a projection for the next few weeks points to Tesla manufacturing 6,000 Model 3 per week. Over the past few months, these instances of slowdowns followed by sudden bursts that reach record production levels have happened several times. In Q2, shutdowns of the Model 3 line corresponded to the installation of upgrades that gave Tesla the capacity to produce more vehicles than before.
Back in April, Tesla shut down the production of the Model 3 to roll out improvements that enabled the company to hit a manufacturing rate of 3,000-4,000 vehicles per week. In May, another set of upgrades were installed that allowed Tesla to get closer to its then-elusive target of producing 5,000 Model 3 per week. Based on the rationale behind Tesla’s previous production shutdowns, it appears that the electric car maker could be in the process of improving the capacity of its Model 3 line once more.
In a way, the slowdown in production reflected in Bloomberg‘s tracker was teased in Tesla Senior Director of Investor Relations Aaron Chew’s meeting with investors and analysts earlier this month. During the meeting, Chew reportedly noted that Tesla is aiming to hit a sustainable production rate of 5,000-6,000 Model 3 for the rest of the third quarter. After this point, Tesla’s ramp for the vehicle would be less radical, with the company reportedly targeting a pace of 7,000 cars per week for Q4 2018, and 10,000 Model 3 per week by mid-2019. Chew also reportedly noted that Tesla’s GA3 assembly line was only running at ~4,000 vehicles per week at the end of Q2 2018, and that the company was only able to hit its 5,000 Model 3 per week target because of an extra ~1,000 vehicles that were manufactured from GA4. Thus, Tesla’s recent slowdown in Model 3 production could correspond to the installation of upgrades for GA3 that would allow it to produce a steady rate of 5,000, or even 6,000 vehicles per week on its own. If these assumptions prove correct, Bloomberg‘s forecast pointing to a 6,000 Model 3 production week definitely becomes plausible.
Tesla is currently attempting to hit profitability this third quarter. To accomplish this goal, the Model 3’s production has to be optimized. Teardowns of the vehicle, both from Germany and in the United States have been unanimous in the conclusion that the Model 3 is profitable. Detroit’s Sandy Munro even noted that the Long Range RWD version of the vehicle could give Tesla as much as 36% worth of profits. At this point, the only thing standing between Tesla and profitability is its capability to scale and sustain the Model 3’s production. If the company achieves this, it would likely prove to be a hard-fought victory for Elon Musk and the Tesla team.
Investor's Corner
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
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