Investor's Corner
Tesla Model 3 production in Gigafactory 3 to begin in second half of 2019: report
The development of Tesla’s Gigafactory 3 continues to move at a rapid pace, with recent reports suggesting that electric car production in the upcoming facility could begin as early as the second half of 2019. Provided that there are no delays in the construction of the factory itself, and provided that Tesla can ship and set up its production lines on time, the latter half of 2019 could signal the beginning of Model 3 production in China.
Local media outlet Caijing.com noted that the factory is about to begin construction, particularly since the 864,885-square meter plot of land in the Lingang Industrial Zone has been leveled. In a post on its official WeChat account, the Shanghai government further indicated that Mayor Ying Yong and Vice Mayor Wu Qing have met with Tesla’s leaders in China while checking the company’s new vehicles like the Model 3. During their visit, the Shanghai officials reportedly encouraged parties involved in the project to expedite the construction of Gigafactory 3 even more.
The progress of Tesla’s Gigafactory 3 has been nothing short of remarkable. When Elon Musk announced the target timeline for the project earlier this year, the company’s critics were immediately skeptical. Tesla initially noted that vehicle production in Gigafactory 3 would start roughly two years after the facility’s construction begins, ramping to an output of 500,000 vehicles per year 2-3 years after. The timeline, which could only be described as classic Elon Musk, was met with doubts from Wall Street. Consumer Edge Research senior auto analyst James Albertine, for one, dubbed Gigafactory 3’s timeline as “not feasible.”
Despite its initial timeline already being met by raised eyebrows from Wall Street, Tesla announced an even more aggressive target for the project after its stellar third quarter. In its Q3 vehicle production and deliveries report, Tesla noted that it was accelerating the construction of Gigafactory 3. The company also noted that it expects the facility’s construction to be rapid and capital-efficient, thanks to lessons learned from the Model 3 ramp in the United States.
Beyond the lessons from the Model 3 ramp, credit is due to the Chinese government for its support for Tesla and the upcoming factory. Local state media has been openly supportive of the project and Tesla as a whole, and the government even bent its rules a little by allowing the electric car maker to become the sole owner of Gigafactory 3. The government’s support became particularly evident when Tesla went unchallenged in its bid for an 864,885-square meter plot of land in Shanghai’s Lingang area, as well as in the rapid release of low-interest loans for the project from local Shanghai banks.
November 29th 2018, Tesla Direct Experience Center officially grand opening at the Wenzhou Fortune Experience Center. To date, Tesla has more than 44 direct experience centers and service centers in mainland China 🇨🇳 .$TSLA #Tesla #China #TeslaChina pic.twitter.com/X8nJHVJCNz
— vincent (@vincent13031925) November 30, 2018
The Chinese government’s favor for Tesla has allowed the company to maintain a strong brand in the country, despite challenges posed by a 40% import tariff placed on the Model S and Model X due to the trade war between China and the United States. Even before US President Donald Trump announced on Twitter that the Chinese government has agreed to “reduce and remove” import tariffs on vehicles from the United States, Tesla’s electric cars, particularly the Model 3, have been garnering a lot of interest among Chinese consumers. This interest became evident during a recent job fair at the Lingang Industrial Zone, when Tesla was forced to extend its hiring hours due to the overwhelming number of applicants for job openings at Gigafactory 3.
Considering China’s reputation for building large-scale facilities in record time, an initial Model 3 production run in Gigafactory 3 by the second half of 2019 is actually quite feasible. With the country’s capability to construct the facility quickly, the start of Model 3 production in China next year would likely be limited only by Tesla’s capability to ship and set up its vehicle production lines on time. If Tesla can accomplish this, there is very little that can go in the way of Gigafactory 3 producing the Model 3 for the local Chinese market before 2019 ends.
Tesla has the potential to be a force in China’s auto market, particularly as the country is aggressively pushing the electrification of its transport sector. China is on track to sell 2 million electric vehicles by 2020 and attain an ICE to EV ratio of 1:1 by 2030. Tesla’s Gigafactory 3, which is expected to produce 500,000 cars per year, could go a long way in helping the country achieve its own ambitious electric car goals, particularly as the company is expected to produce its two mass-market vehicles in the facility — the Model 3 sedan and the Model Y SUV.
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.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Tesla has passed a critical self-driving milestone Elon Musk listed in Master Plan Part Deux
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