News
Tesla Model 3 has an important upper middle class audience to please
As Elon Musk continues to focus on his top 3 priorities for Tesla, emphasis on preparing for Model 3 production – arguably the most important vehicle in the company’s history – couldn’t be more pertinent.
The Model 3 will be emblematic of Tesla’s capacity to offer a highly safe and efficient means of transport for a middle to upper middle class segment that largely depends on vehicle reliability in order to commute. It looks like these upwardly mobile folks are buying into that Tesla promise (pun intended): by October 2016, nearly 400,000 reservations had already been placed on the Tesla Model 3.
Starting at $35,000 before incentives, the Model 3 will achieve a minimum of 215 miles of range per charge and has been designed to attain the highest safety ratings in every category. According to the Tesla website, “The Model 3 combines real world range, performance, safety, and spaciousness into a premium sedan that only Tesla can build.” Potential Model 3 buyers make a reservation through the company’s website by putting down a $1000 deposit. The Model 3 has a starting price of about half the base price of the flagship Tesla Model S and has the size and stance of the Mazda 3.
Jessica Caldwell, an Edmunds.com analyst, argues that, if Tesla Motors wants “to bring the EV to the mass market, they need the Model 3 to be successful.”
The Model 3 will be a sedan, although other versions may one day include a Model Y compact SUV. Base rear-wheel-drive Model 3 vehicles are expected to achieve at least 215-miles of range; all-wheel drive will be offered, and a larger battery capacity with longer range is expected. Tesla’s Full Self-Driving Capability is also expected to be a standard offering.
“This is their chance to prove that they are not just a specialized niche automaker, but actually a long-term volume automaker,” said Karl Brauer, an analyst at Kelley Blue Book. “They have to establish that they can build a high-quality volume vehicle.”
Being upper middle class is a swirling confluence of financial comfort, identity, dreams, and lifestyle options. The Tesla Model 3 may very well become one of the most significant markers of status stability, with its associated components of having a college education, white-collar work, economic security, and home ownership. Soon, many upwardly mobile consumers will be adding “owning a Tesla” to that definition. Indeed, fewer than 5% of reservation holders are likely to choose a minimalist entry level Model 3 car. By contrast, close to 7% say they intend to check every available check box in the Model 3 Design Configurator once it becomes available.
If there’s an option available, the future upscale Tesla Model 3 audience will get it, as the number of options will be new indicators of levels of wealth and class.
Of course, these soon-to-be Tesla owners will have high expectations for all aspects of the Tesla process. First production of Model 3 is still scheduled for mid 2017, while delivery estimates for new reservations are expected to take place mid 2018 or later. Musk admitted that Tesla had hubris in designing and engineering the complicated Model X. As a result, Tesla learned a lot about selling, building, and delivering, which it applied to the Model 3 with much greater production streamlining. “With any new technology, it takes multiple iterations and economies of scale before you can make it affordable,” Musk has said. A mass-market car “was only possible to do . . . after going through the prior steps.”
The Model 3 is the next step in the learning process, but Tesla has done the preparation.
The Model 3 was unveiled in March of 2016 with operational prototype cars. In anticipation of much higher delivery numbers associated with the Model 3, Tesla hired former Audi executive Peter Hochholdinger as its Vice President of Vehicle Production. Hochholdinger had been in charge of production for the A4, A5, and Q5 vehicles, with around 400,000 vehicles per year under his watch. He should be a key asset as Tesla looks to roll out Model 3s in quantities that far exceed the number of cars the company has made to date.
Tesla has dealt lately with some supplier issues and has brought production of some components in-house. Other components, however, continue to be manufactured by established companies. For example, reports indicate that the Model 3’s center touchscreen will be supplied by LG Display.
By spring 2017, Model 3 photos and videos — shot both by bystanders and insiders — should start to circulate. Eventually, too, the government will need to ascertain the safety of Model 3 via crash-testing, and resulting reports will have a big impact on eventual delivery dates.
The Model 3 sedan will use some of the same glass technology that the company is using for its solar roof tiles, which should introduce an upper middle class audience to new ways of thinking about residential energy systems. The Model 3 is said to accelerate with an alluring still rush. It is just that rush— as well as zero-emissions and self-driving capability— that the upper middle class market has been awaiting.
Investor's Corner
SpaceX’s biggest earnings test yet lands Tuesday, and Tesla shareholders should be watching
SpaceX reports earnings Tuesday as Wall Street watches AI spending, Starlink growth and Tesla merger
SpaceX reports third quarter results after the market closes Tuesday, with a webcast at 4:30 p.m. ET streamed on X, and Tesla follows a day later. Bloomberg consensus, cited by Pepperstone, calls for revenue of $12.89 billion, adjusted EBITDA of $6.62 billion and adjusted EPS near $0.15. That would be about 65% growth from the second quarter and SpaceX’s first profitable quarter since its IPO. Analysts expect roughly $6.4 billion from AI and $4.9 billion from Starlink, which is projected to reach 14.3 million consumer subscribers. Capital spending is forecast at $19.6 billion, leaving free cash flow near negative $11.6 billion.
The numbers matter because SpaceX has spent months trying to win over a skeptical market. It priced its record IPO at $135, spiked to $225.64, then sank near $105 in early August. Friday’s close of $146.03 sits about 28% below the June high. The Q2 report beat on revenue at $7.8 billion and put Starlink at 12 million subscribers, but $18.4 billion of capex hurt the stock. Since then SpaceX reached orbit on Starship Flight 14 with 26 Starlink V3 satellites, agreed to buy 800 MHz spectrum for about $8 billion as part of its Starlink Mobile push, and signed a fourth compute hosting deal in four months worth roughly $13 billion a year from December. Management is targeting more than 2 gigawatts of compute by year end and a $100 billion annualized revenue run rate. Evercore ISI, which raised its target to $275, said the quarter may be judged more on those targets than the reported figures
All of this sits under the Tesla merger question. Barclays analyst Dan Levy expects an all stock deal in which SpaceX buys Tesla at a premium, using reference values of $2.1 trillion and $1.5 trillion, and said an announcement would need to come by late October or early November to be voted on at Tesla’s December 6 annual meeting. Barclays estimates Musk would hold about 37% of the combined company and 56% of the votes. Musk said in July that combining companies cannot be discussed on an earnings call, but an investor question asking when SpaceX will merge with Tesla is sitting on SpaceX’s Q&A platform, and Teslarati has tracked how the Roadster demo revived the talk.
If a deal happens, Tuesday’s result would effectively set the price Tesla holders would receive. Their shares would convert into SpaceX stock, along with exposure to a company with a heavy investment on AI, while Tesla itself expects 2026 capex above $25 billion. A strong quarter and calmer spending would make that exchange easier to sell. Another round of heavy capex and a falling stock would make it harder.
News
SpaceX’s Gwynne Shotwell just made a quiet gesture toward Tesla
SpaceX president Gwynne Shotwell quietly followed Tesla on X, and merger watchers noticed right away.
SpaceX President and COO Gwynne Shotwell has started following Tesla’s official account on X, a small change that landed in the middle of a very loud merger conversation. Whole Mars Catalog joked about it on Sunday.
A follow is not an announcement, and neither company has said anything about a deal. What gives the moment weight is the timing. Barclays analyst Dan Levy has told clients that an agreement could come before Tesla’s annual meeting, which must be held by December 6, with SpaceX as the buyer in an all stock deal, as we reported after the Roadster unveiling. Wedbush’s Dan Ives has stuck with a 2027 timeline.
“Shit, I better start following their X account if i’m gonna be helping run the company”
— Whole Mars Catalog (@wholemars) October 18, 2026
Shotwell is the executive most worth watching if the two companies do move closer. When Musk was asked at the All In Summit why Tesla and SpaceX remain separate, Shotwell sat next to him and said SpaceX personnel had already moved into xAI to fill leadership and engineering gaps. The businesses were integrating “faster than I thought,” she said, though “not fully integrated yet.” Her responsibilities have also grown since SpaceX absorbed xAI, and she now oversees operations that include Grok and the company’s AI compute buildout.
The financial links are already there. Tesla’s $2 billion xAI investment turned into a stake of less than one percent in SpaceX, the two share the Terafab chip project in Austin, and Musk exercised his 2018 Tesla options a week after SpaceX began trading, a sequence analysts flagged as giving SpaceX public shares to use in a deal. Musk holds about 20 percent of Tesla and controls 85.1 percent of SpaceX’s voting power, according to our earlier breakdown.
The next test is close at hand. SpaceX reports its second earnings as a public company on Tuesday after the close, and Tesla follows on Wednesday. Musk told analysts in July that “we can’t talk about combining companies and that kind of thing on an earnings call,” so a direct answer is unlikely from either stage. Tesla shareholders can still submit and vote on questions through the Say portal until 4 p.m. EDT on Monday, and the merger is a recurring theme in the queue.
Elon Musk
Tesla Roadster owners to get “Flying Stunt Mode” and looping track access
Musk says Roadster owners can command the unveiling stunts autonomously, with a Texas looping track.
Elon Musk says owners of the new Tesla Roadster will be able to ask the car to perform the stunts Tesla showed at its unveiling, with the car doing the driving itself. Musk made the comment Saturday in a reply on X to tech blogger Robert Scoble, and he added a promise of a looping track at Tesla’s Texas headquarters.
Scoble had argued that the person in the Roadster is not really driving it. In his description, the driver operates a computer that tells another computer what to do, with steering, braking and acceleration all handled by wire. Musk answered, “True. You will be able to ask the Roadster to perform any of the tricks shown autonomously, as it will be sentient. Also, we will have a wild looping track (crazier even than Hot Wheels) at our Texas HQ where you can test out your Roadster.”
@Scobleizer True.
You will be able to ask the Roadster to perform any of the tricks shown autonomously, as it will be sentient.
Also, we will have a wild looping track (crazier even than Hot Wheels) at our Texas HQ where you can test out your Roadster.
— Elon Musk (@elonmusk) October 17, 2026
At the October 15 event outside Waco, the car drove up a curved ramp until it was upside down, flew off on cold gas thrusters, flipped and landed. It also hovered over a Cybercab, Cybertruck, Semi, Model Y and Model 3 while moving. As we noted in our breakdown of the three Roadster configurations, Musk said at the event that the car “literally is just going to puff itself up” to perform the maneuvers whenever an owner wants. Saturday’s reply adds that the car would run them on its own.
Tesla has described some of the hardware that would make that possible. The Roadster uses steer by wire with a yoke, and its cold gas thrusters rely on electric actuators for small adjustments in flight. A fan system under the car creates suction, which Tesla says is strong enough to hold it upside down, a setup we covered in our look at the Roadster’s fan system and thrusters.
Musk did not say when an autonomous stunt feature might arrive, how it would work, or what he means by sentient. He also gave no size, location or opening date for the Texas track. Production is planned for Giga Texas in 2027 or 2028, and Tesla says the car is not approved for public road use. The Rocket version, the one built to fly, is invite only.
The comment follows a week of Musk teasing the event, including his claim that the demo would be a banger, which we covered before the stream. Tesla reports third quarter earnings on October 21, and shareholders can submit and vote on questions through the Say portal until 4 p.m. EDT on October 20, according to our earnings Q&A preview. A question about autonomous Roadster stunts and the Texas track would be a quick way to get specifics from management.
