Investor's Corner
Tesla’s steadily-improving Model 3 production ramp is starting to win over Wall St.
True to Elon Musk’s words last month about the challenges Tesla faced during the Model 3 ramp, the company appears to be well on its way to leaving its self-imposed “production hell.” As Tesla’s Model 3 production shows more encouraging signs, Wall Street appears to be adopting an increasingly optimistic outlook on the electric car and energy company.
Amidst the noise surrounding Elon Musk’s tweets about the funding for Tesla’s possible privatization being secured, the company is steadily making progress in an area that matters a lot this Q3 — the Model 3 production ramp. Tesla is currently attempting to hit profitability this Q3, and being the vehicle expected to comprise most of Tesla’s electric car sales for the quarter, the Model 3 is key to this goal.
Tesla was finally able to hit its self-imposed target of producing 5,000 Model 3 per week during the final week of June. When the company released its Q2 production and deliveries report, some Wall St. analysts promptly expressed their doubts about the company’s capability to sustain the car’s optimum production rate. In the weeks that followed the release of the Q2 production and deliveries report, Tesla showed signs that it is capable of sustaining the optimum production pace of the Model 3. Hiring was ramped, more than 19,000 new Model 3 VINs were filed in a 2-week period, test drives for the Model 3 were started, and programs such as the 5-minute Sign & Drive delivery system were adopted. The Model 3’s sustained production was ultimately confirmed in the Q2 earnings call when Musk noted that Tesla was able to manufacture 5,000 Model 3 per week during “multiple weeks” in July.
Tesla has exhibited the same encouraging signs this August. Just recently, the company registered a record 16,000 new Model 3 VINs in a seven-day period — a feat that took the company roughly eight months to accomplish when it first started producing the electric car. Tesla appears to have begun initiatives to bring the Model 3 overseas as well, with viewings being scheduled for Australia and New Zealand. Even more recently, George Galliers of Evercore ISI, after a tour of the Fremont factory, released a note stating that Tesla is likely well on its way to achieving a steady weekly production rate of 5,000-6,000 Model 3 per week. The analyst even noted that despite the controversy over the company’s possible privatization, the fundamentals of Tesla’s operations are encouraging.
“Tesla seems well on the way to achieving a steady weekly production rate of 5,000 to 6,000 units per week. We are incrementally positive on Tesla following our visit. We have confidence in their production. We did not see anything to suggest that Model 3 cannot reach 6k units per week and 7k to 8k with very little incremental capital expenditure. Focusing on the fundamentals and setting aside talk of privatization, we are incrementally positive on Tesla following our visit.”
The Evercore ISI analyst is not alone in his optimistic outlook on Tesla, either. Sanford C. Bernstein analyst Toni Sacconaghi, who previously had a $265 price target for Tesla stock (NASDAQ:TSLA), recently raised his price target for the company to $325 per share. Sacconaghi is not even an avid supporter of Elon Musk, being one of the analysts who attracted the CEO’s ire during the now-infamous Q1 earnings call, where he asked what Musk described as “boneheaded” questions.
Jefferies Financial Group also lifted their price objective for Tesla from a conservative $250 to an optimistic $360 in a report issued last week. The firm also gave Tesla stock a “Neutral” rating. Berenberg Bank reissued a “Buy” rating for Tesla stock, placing a price objective of $500 for the company’s shares. JPMorgan Chase & Co., which still has a “Sell” rating on TSLA, raised its price target to $308, a significant increase from its previous price target of $195.
While Tesla stock remains a battleground between the company’s supporters and critics, Wall Street seems to be showing signs that it is starting to adopt a more optimistic stance on the electric car maker. If the company’s new price targets from Wall Street are any indication, it appears that even firms that have been critical of Tesla are starting to recognize and acknowledge the progress the electric car maker is making. If Tesla nails its Model 3 targets this Q3 by sustaining the vehicle’s production at a rate of 5,000 units per week or more, Elon Musk’s vision of a profitable Tesla might actually come true.
As of writing, Tesla stock is trading up 0.51% at $340.43 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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
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