Investor's Corner
Elon Musk reveals first Tesla Model 3 Performance in new assembly line at Fremont
Elon Musk has announced that the first Model 3 Performance Dual Motor has rolled off Tesla’s new assembly line. Musk’s update comes roughly a month after Tesla opened orders for the high-performance version of the compact electric car.
The Model 3 Performance was initially expected for July. In a series of tweets back in April, Musk stated that the Performance and the Dual Motor AWD variant of the vehicle would likely be introduced in July. The popular white seats option — another highly-anticipated feature for the Model 3 — was teased for a July release as well. According to Musk’s tweet, however, the Tesla team was able to set up a new Model 3 assembly line in just three weeks with “minimal resources.”
Amazing work by Tesla team. Built entire new general assembly line in 3 weeks w minimal resources. Love u guys so much! Pic of 1st Model 3 dual motor performance coming off the line … pic.twitter.com/Xr55P3fmGd
— Elon Musk (@elonmusk) June 16, 2018
Part of the mystery behind the Model 3 Performance’s production line is exactly where general assembly of the vehicle is being conducted. While not yet officially announced, the tent-like structure at the background of the Model 3 Performance in Musk’s tweet seems to directly correspond to a seemingly growing structure that was spotted in satellite images of the Fremont factory over the past few weeks. The progress in the structure’s construction could be seen in the following pictures from Building Tesla.
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- A satellite image of Tesla’s Fremont factory as of June 16, 2018. [Credit: Building Tesla]
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- A satellite image of Tesla’s Fremont factory as of June 3, 2018. [Credit: Building Tesla]
The fact that Tesla is already starting the production of the Model 3 Performance bodes well for the company’s capability to manufacture the compact electric car in volume. Musk, after all, has previously noted on Twitter that Tesla would only start manufacturing the Model 3 Performance and the Dual Motor AWD variant once the company is already producing the electric cars at a pace equivalent to 5,000 vehicles per week. Back in the 2018 Annual Shareholder Meeting, Musk announced that Tesla is producing 500 Model 3 per day, or 3,500 Model 3 per week. A recently-leaked email from Elon Musk, however, suggested that the company is now targeting a pace of 700 Model 3 per day, which equates to 4,900 vehicles per week, just 100 cars shy of its goal of producing 5,000 Model 3 per week by the end of Q2 2018.
The Tesla Model 3 Performance is the top-tier variant of the compact electric car. Fitted with an AC induction motor in the front and a partial permanent magnet motor in the rear, the Model 3 Performance is capable of sprinting from 0-60 mph in just 3.5 seconds. The vehicle also has a top speed of 155 mph and a range of 310 miles per charge. The white seats option will also be available for the Model 3 Performance only, at least until Tesla fully optimizes its production line. The Model 3 Performance, with all options except Autopilot, is available for $78,000, making it a bit pricier than the Model S 75D, which starts at $74,500.
The Model 3 Performance is set to deliver formidable performance, however. According to Musk, the Model 3 Performance would be 15% faster than a BMW M3 on the track. Musk has also teased that there’s a chance that the high-performance variant of the Model 3 would see an even higher power output than initially announced.
Configuration emails for the Model 3 Performance are now rolling out to reservation holders. Musk has also announced that the Model 3 Performance will be designated as test drive vehicles in Tesla stores within the coming weeks.
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.”
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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.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
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