Investor's Corner
Tesla’s last-month Model 3 production blitz for Q3 will likely be its most impressive yet
This Q3 2018 would likely be one for Tesla’s history books, since this could be the time when the company hits a breakthrough point in its journey towards becoming a mainstream carmaker. Amidst the noise last Friday resulting from the departure of two executives and Elon Musk’s actions during a podcast, the company released an update stating that it would likely deliver twice as many cars this third quarter as it did in Q2 2018.
Tesla’s optimistic and bold forecast for the third quarter, which was authored by Elon Musk, was published on the company’s official blog. The post was a letter sent to Tesla employees, and it noted that the company is “about to have the most amazing quarter in (its) history, building and delivering more than twice as many cars as (it) did last quarter.”
Tesla delivered a total of 40,740 vehicles in Q2 2018, of which 18,440 were Model 3, 10,930 were Model S, and 11,370 were Model X. The company was able to manufacture a total of 53,339 vehicles during Q2 as well, comprised of 28,578 Model 3 and 24,761 Model S and X. Considering Musk’s recent letter to Tesla’s employees, it appears that Tesla is attempting to deliver more than 80,000 Model 3, Model S, and Model X this Q3.
It took a lot of pain and effort to get to this point. Tesla’s trials and Elon Musk’s tribulations since the company started manufacturing the Model 3 are well-documented. Since July 2017, Tesla faced bottleneck after bottleneck in its Fremont factory and at Gigafactory 1 in Nevada. The progress of Tesla’s Model 3 push was nothing short of “production hell,” and CEO Elon Musk was not exaggerating when he described the past year as one of the “most painful” 12 months of his career.
The second quarter appears to have been a pivotal point in Tesla’s Model 3 push, as it was the quarter when it was finally able to hit its manufacturing targets for the first time. Tesla was able to produce 5,000 Model 3 during the final week of June, on top of 2,000 Model S and X. This 7,000-vehicle week was considered a milestone by the company, though it was considered unremarkable by Ford Europe CEO Steven Armstrong, who stated that the legacy automaker could produce 7,000 vehicles in 4 hours. Tesla’s critics were also dismissive of the production milestone, stating that the company would probably not be able to maintain its optimum production rate for the Model 3 during the following months of Q3.
Tesla appears to have taken these criticisms as a personal challenge to prove its critics wrong. During the company’s Q2 2018 earnings call, Elon Musk noted that Tesla was able to produce 5,000 Model 3 per week during “multiple weeks” in July. In August, Tesla showed even more signs that the Model 3’s production was still going full throttle. The Model 3’s VIN filings rocketed past the 100,000-mark, and Bloomberg‘s production tracker, which has only gotten more accurate during the past months, estimated that at one point in August, Tesla produced more than 6,000 Model 3 in a week. Evercore ISI analysts who visited the Fremont factory also concluded that Tesla could ramp to 7,000-8,000 Model 3 per week with minimal CapEx.
September is the final month of the third quarter, and Tesla is already showing indications that its Model 3 push would only get more aggressive. Reports have emerged that Model 3 VINs in the 100k range are already being assigned to reservation holders. A Tesla employee who works at Fremont’s paint shop has also teased on Twitter (in a post that has since been deleted) that production is going well, and that the company is “smashing records.”
During the past two quarters, Tesla has shown a tendency to adopt radical and unorthodox strategies to push its manufacturing capabilities during the final month of a quarter. In Q1, the last week of March saw Tesla going all-in to produce more than 2,000 Model 3 in a week. In Q2, June saw the company setting up GA4 inside a sprung structure as a means to hit its production target of building 5,000 Model 3 in one week. It remains to be seen if Tesla would adopt something similarly unique for Q3, but one thing seems certain — the company is about to go on a production blitz at a scale unmatched in the company’s history.
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.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Tesla takes a step towards removal of Robotaxi service’s safety drivers
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
