Investor's Corner
Tesla’s end-of-Q3 Model 3 production and delivery ramp looks like an electric car invasion
It seems that Tesla board member Kimbal Musk was not kidding when he noted in a CNBC Closing Bell segment that the number of Model 3 which would appear in US roads near the end of September would be shocking to some. After Tesla’s volunteer-boosted delivery weekend — which saw members of the community dedicating some of their time to help out new owners with the features and functions of their electric cars — it is starting to become evident that Q3 2018 could be the quarter when the Model 3 starts its invasion of the US passenger car market.
The Model 3 is Tesla’s most ambitious vehicle. Radically designed from the ground up, the Model 3 was the car that would determine Tesla’s future. Elon Musk himself dubbed the vehicle as a “bet-the-company” situation, where its success or failure would equate to Tesla’s own rise or fall. It took a while for Tesla to hit its stride with Model 3 production, with the company only hitting its then-mythical goal of manufacturing 5,000 of the electric sedans in a week by the end of Q2 2018, six months later than initially expected.
The Model 3 has started to show its potential in the US passenger car market over the past months. Back in July, sales estimates from auto tracking website GoodCarBadCar suggested that Tesla sold 14,250 Model 3 in the month, making it 7th place in America’s list of best-selling passenger cars. Considering that mainstream, lower-priced vehicles like the Toyota Camry and the Honda Civic were included in GCBC‘s list, the Model 3’s 7th place was more than respectable.
While the Model 3’s sales in July were undoubtedly impressive, its August estimates were even more noteworthy. With an expected 20,450 units sold during August, the Model 3 became the 5th-best-selling passenger car in the US, beating out the Hyundai Elantra and the Nissan Altima. The Model 3 was even listed as the 15th-best-selling vehicle in GCBC‘s overall Top 20 list, which includes titans like the Ford F-150 and the Toyota Rav4.
plenty of time to cover your puts before they go to zero $TSLAQ $TSLA pic.twitter.com/vOcuGyZtfw
— myname (@cbotnyse) September 23, 2018
https://twitter.com/danahull/status/1043655097819979776
It is no secret that Tesla has a tendency to initiate a blitz of deliveries and production before a quarter ends. The company did this in Q1 when it was struggling to build 2,500 Model 3 in a week, and it adopted the same strategy for Q2 when it was trying to manufacture 5,000 of the electric sedans in a seven-day period. This third quarter, Tesla is aiming to produce 50,000-55,000 Model 3 — a record number of vehicles — while attaining profitability. For the company to get a shot at achieving these targets, cars have to be delivered to reservation holders. These efforts, of course, culminated in the recent volunteer-boosted delivery weekend.
As the Tesla community was mobilized in the United States and Canada, it soon became apparent that the company is moving a vast number of vehicles. In the United States, social media posts from Tesla owners shared images of numerous semitrailers transporting electric cars all across the country. Anecdotes from owners who volunteered in the weekend delivery push indicated that numerous vehicles were being moved to service centers, where reservation holders await them. Even a journalist who covers Tesla on a consistent basis shared a clip of a truck full of Model 3 being transported. In Canada, members of the Tesla community have also spotted large lots filled with Model 3, Model S, and Model X. Images taken of centers in British Columbia, Vancouver, Toronto, and Ontario, also depicted a busy, yet very productive volunteer-boosted weekend.
Lots and lots and lots of #Tesla 's .. three lots full plus a hall full of new S,X and 3's waiting delivery in Toronto.. Good luck shorts pic.twitter.com/Fw1UQMyv6y
— Avron (@Avron_p) September 23, 2018
https://twitter.com/TeslaArmy/status/1043960545014013952
In a letter to employees, Elon Musk wrote that Tesla 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.” Kimbal Musk, for his part, noted that “it’s really gonna blow people’s minds how many Model 3s are gonna appear in America in just the next couple of weeks.” If Tesla’s busy delivery weekend, as well as the apparent invasion of electric cars being sighted in the US and Canada, are any indication, the company might very well exceed expectations this quarter. It will not even be surprising if the Tesla Model 3 moves up a couple more steps in GoodCarBadCar‘s list of best-selling passenger cars in the US for September.
Tesla has only been in the auto industry for 15 years, and over that time, it has transformed itself from a niche manufacturer that offered one small, quick, two-seater all-electric sports car into a company that is taking on veterans with premium electric cars that force legacy carmakers to come up with compelling EVs of their own. Tesla still has a long way to go before it masters the auto business, and Elon Musk himself would be the first to admit that gross miscalculations, such as the Model X’s overcomplicated design and the Model 3 ramp’s over-reliance on robots, have happened in the past. Despite this, Tesla remains a company that commands a strong following — one that is willing to pay it forward when needed.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
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Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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