Investor's Corner
Tesla Model 3 in $35k base trim to start production ‘in the next 8 months’
Elon Musk’s prediction last July that the Model 3’s production hell is coming to an end seems to be ringing true. Tesla is currently in the final month of Q3 2018, and according to Musk in a letter to employees shared last Friday, the company is on the cusp of its “most amazing quarter” yet, as it prepares to build and deliver “more than twice as many cars” as it did in the second quarter.
The catalyst for Tesla’s growth is the Model 3. Dubbed by Elon Musk as a “bet-the-company” vehicle, the Model 3’s success or failure could dictate Tesla’s future. So far, though, the Model 3 has been performing well, being dubbed by auto sales tracking website GoodCarBadCar as the 5th best-selling passenger car in the United States last August. Tesla was able to achieve this despite producing only three variants of the electric car — the Long Range RWD, the Long Range AWD, and the AWD Performance version. The Model 3’s base trim, which is expected to cost $35,000 before any options, is still not being produced.
If Tesla plays its cards right, the $35,000 standard trim Model 3 could very well become a fossil-fuel car killer. At its price point, the base Model 3 becomes comparable in price to some of the United States’ best-selling passenger cars like the Toyota Camry, whose top-of-the-line XSE V6 trim is priced at $34,950. While the potential of the $35,000 Model 3 is vast, Tesla and even CEO Elon Musk have been quite conservative when releasing updates about the upcoming electric sedan.
That is, until now. Just recently, Worm Capital analysts Eric Markowitz and Dan Crowley published a post on the financial firm’s website outlining their insights on Tesla after a tour of Gigafactory 1. Tesla’s head of investor relations Martin Viecha facilitated the tour, while also provided some updates on the company’s upcoming projects. Among these projects was the $35,000 standard trim Model 3.
According to the analysts, they were informed that the Model 3’s base variant, which is equipped with a shorter-range battery, would likely start production “in the next 8 months.” With this statement in mind, it appears safe to infer that by April or Mar 2019, Tesla would be manufacturing the $35,000 base Model 3.
Contrary to an emerging Tesla bear thesis that demand for the Model 3 is declining, the analysts noted that the electric car maker is currently focused on selling higher-margin cars such as the Model 3 Performance and the Long Range AWD Model 3, where “demand continues to exceed what is being produced.” This is in line with Tesla head of sales Robin Ren’s statement in the Q2 2018 earnings call, when he noted that the company is seeing “more orders for the All-Wheel Drive dual-motor car and performance cars combined than the rear wheel drives.”
Back in June, Tesla CEO Elon Musk provided a rough estimate as to when the initial production of the $35,000 Standard trim Model 3 would begin. Musk also noted that Tesla would likely start producing the vehicle’s smaller battery packs at the end of 2018.
“We will definitely offer a $35,000 version of the Model 3. And probably at the end of this year is when we will be able to make a smaller version of the battery pack, and get into volume production of $35,000 version in Q1 next year. We would definitely honor that obligation, and we would do so right now if it were possible,” Musk said.
The recent timeline related by Martin Viecha covers and exceeds Q1 2019, considering that his estimated timeframe ends at either April or May next year. That being said, Tesla definitely appears to be getting ready for the rollout of the $35,000 base Model 3, as well as succeeding models like the standard-range AWD version. Once Tesla is manufacturing the full range of the Model 3’s variants, it would not be too surprising if the vehicle ends up dethroning best-selling passenger cars like the Toyota Camry in the United States.
The Tesla Model 3’s base variant has a 220-mile range, a 0-60 mph time of 5.6 seconds, and a top speed of 130 mph. The vehicle starts at $35,000 before any options.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
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