

Investor's Corner
The Tesla Model 3’s defiance of TSLA critics and its EV market dominance explained
To state that Tesla (NASDAQ:TSLA) is a polarizing company would be an understatement. Tesla commands a strong following, comprised of avid supporters and passionate critics alike. This was particularly evident in the Model 3, a car that was declared a “lemon” by critics at one point, and a car that has become one of the most popular electric cars in the industry today.
The Model 3 has its own fair share of critics. Last September, high-profile TSLA short Jim Chanos declared that the Model 3 has inherent problems that make it a “lemon.” Seemingly in response to Chanos’ statement, the Model 3 dominated the US luxury auto market in 2018, and with its international rollout this year, the vehicle has also started making an impact in markets such as Norway and China.
TSLA investor @Incentives101, an economist with a background in macro research, stated in a message to Teslarati that Tesla’s vehicles, particularly the Model 3, defied several conventions when it was released. With its unique combination of uncompromising performance, efficiency, and a reasonable price, the Model 3 has become a vehicle that constantly defies critics every step of the way.
The economist explained that consumers purchase vehicles according to preferences that are subject to budget constraints. The buying process then becomes a matter of selecting which car is the best option within the confines of a budget. “Consumers preferences can be easily understood when there is data available i.e when they clearly show what they want. With a car or any good for that matter, consumers are basically solving an optimization problem. Hence, this is why advanced economic models — general equilibrium — are on essence an optimization problem,” the economist wrote.
There are many variables that consumers consider when purchasing a big-ticket item such as a car. Generally, there are no internal combustion vehicles that are as efficient as an electric car, but EVs prior to Teslas usually had worse performance and a higher price, which, in turn, discouraged buyers despite their lower total cost of ownership. Electric cars before the arrival of the original Tesla Roadster and the Model S also introduced a new constraint: range. Under these circumstances, it was not rare to see buyers who valued efficiency and/or are not price-sensitive selecting an EV, and those that valued performance and price opting for a petrol-powered car.
It is these very metrics that the Tesla Model 3 was able to completely address. Tesla refused to compromise with the Model 3, making the electric sedan a vehicle that is incredibly efficient with performance that matches the best that the industry has to offer. What’s remarkable was that Tesla was able to accomplish this while keeping the Model 3’s price reasonable. And this, according to the economist, has resonated with consumers. “When Elon Musk says it’s insane to buy something else other than a Tesla, it’s because it literally is. You can prove it with math,” the economist stated.

The researcher added that this is one of the key reasons why Tesla and the Model 3 have proven incredibly resilient despite the negative narrative surrounding the vehicle and the company as a whole. It is also something that is frequently misunderstood by mainstream analysts and the company’s critics alike. Fortunately for Tesla, consumers by nature are drawn to superior products, and this is steadily becoming more and more pronounced with the Model 3’s international expansion.
“Whenever you read experts saying that Tesla has a 10-year advantage, this is what it means. When the media and Wall Street compare Tesla to other OEMs, when they talk about units of cars vs. other OEMs, it really doesn’t matter. None of them can find an example in history when consumers have behaved as irrationally as what they’re implying. No matter how many hit pieces about Elon Musk or Tesla, how many stock downgrades, how many bear notes, consumers won’t care about it. We already know what consumers care about; it will be impossible to stop it,” the economist wrote.
Tesla stock has so far slipped around 32% this year, following a challenging first quarter and another loss in the second quarter despite record delivery numbers. By contrast, the S&P 500 has risen about 16.7% year to date.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla gets $475 price target from Benchmark amid initial Robotaxi rollout
Tesla’s limited rollout of its Robotaxi service in Austin is already catching the eye of Wall Street.

Venture capital firm Benchmark recently reiterated its “Buy” rating and raised its price target on Tesla stock (NASDAQ: TSLA) from $350 to $475 per share, citing the company’s initial Robotaxi service deployment as a sign of future growth potential.
Benchmark analyst Mickey Legg praised the Robotaxi service pilot’s “controlled and safety-first approach,” adding that it could help Tesla earn the trust of regulators and the general public.
Confidence in camera-based autonomy
Legg reiterated Benchmark’s belief in Tesla’s vision-only approach to autonomous driving. “We are a believer in Tesla’s camera-focused approach that is not only cost effective but also scalable,” he noted.
The analyst contrasted Tesla’s simple setup with the more expensive hardware stacks used by competitors like Waymo, which use various sophisticated sensors that hike up costs, as noted in an Investing.com report. Compared to Tesla’s Model Y Robotaxis, Waymo’s self-driving cars are significantly more expensive.
He also pointed to upcoming Texas regulations set to take effect in September, suggesting they could help create a regulatory framework favorable to autonomous services in other cities.
“New regulations for autonomous vehicles are set to go into place on Sept. 1 in TX that we believe will further help win trust and pave the way for expansion to additional cities,” the analyst wrote.
Tesla as a robotics powerhouse
Beyond robotaxis, Legg sees Tesla evolving beyond its roots as an electric vehicle maker. He noted that Tesla’s humanoid robot, Optimus, could be a long-term growth driver alongside new vehicle programs and other future initiatives.
“In our view, the company is undergoing an evolution from a trailblazing vehicle OEM to a high-tech automation and robotics company with unmatched domestic manufacturing scale,” he wrote.
Benchmark noted that Tesla stock had rebounded over 50% from its April lows, driven in part by easing tariff concerns and growing momentum around autonomy. With its initial Robotaxi rollout now underway, the firm has returned to its previous $475 per share target and reaffirmed TSLA as a Benchmark Top Pick for 2025.
Elon Musk
Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake
A Swedish pension fund is offloading its Tesla holdings for good.

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.
The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.
Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.
However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:
“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”
Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.
Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

(Photo: Tesla)
There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.
Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.
AP7 did not list any of the current labor violations that it cited as its reason for
Investor's Corner
xAI targets $5 billion debt offering to fuel company goals
Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.
Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.
According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.
Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.
Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.
As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.
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