Investor's Corner
Tesla’s more experienced rivals in the US auto market are feeling the Model 3’s presence
When Elon Musk wrote about his secret Master Plan in 2006, he envisioned a reasonably-priced electric vehicle that can take on the best-selling fossil fuel-powered cars in the market. It took years, but the electric car that Musk mentioned 12 years ago is here, and it’s called the Tesla Model 3.
The Model 3 is Tesla’s first attempt at creating a mass-market car. The company’s vehicles prior to the Model 3 — the Model S and Model X — sold well, but they were premium vehicles that compete in the luxury segment. The Model 3 was designed to be something else. It was an electric car designed to provide a viable and superior alternative to fossil fuel-powered automobiles. The Model 3 is even priced aggressively, starting at $35,000, or roughly the price of a top-tier Toyota Camry.
Tesla’s ramp of the Model 3 was not easy. In an interview earlier this year, Elon Musk described the past 12 months, much of which was spent ramping the electric sedan’s production, as one of the most painful and difficult years of his career. As Tesla released its Q3 production and delivery numbers, though, it appeared that the electric car maker has finally left Elon Musk’s self-dubbed “production hell.” Tesla produced a total of 80,142 electric cars in Q3, 53,239 of which were Model 3. Deliveries totaled 83,500 vehicles, which included 55,840 Model 3.
There is no denying that Tesla’s production and delivery figures for the Model 3 in Q3 were encouraging. Tesla has not revealed the monthly sales figures of the Model 3 yet, but early estimates of the electric car’s sales in September point to more than 22,000 units being delivered during the month. This particular number is just an estimate, but the rest of the US auto market, including some of the auto industry’s most respected brands, are starting to feel the presence of the Model 3.
One of these carmakers is BMW AG. In a statement to Bloomberg, Bernhard Kuhnt, Chief Executive Officer of BMW North America, acknowledged Tesla’s increasing presence in the auto market. BMW was among the carmakers that saw a small gain in September, though its 1.3% rise was primarily due to the strength of the BMW X3, a crossover SUV that would eventually be challenged by Tesla’s upcoming Model Y. With the Tesla Model 3, BMW’s passenger cars such as the 3-Series and the 5-Series are seeing intense competition.
“Tesla is now ramping up their volumes, and it’s putting pressure on that market segment. In that environment, I’m very, very pleased to say we were up,” Kuhnt said.
The Model 3’s presence could also be seen in the performance of Mercedes-Benz on September. The legacy carmaker’s deliveries dropped 9.8% overall, and the Mercedes-Benz C-Class, which is among the United States’ best-selling luxury sedans, saw a steep 24% plunge. Lexus, Toyota Motor Corp.’s luxury brand, saw a 6.1% decline in September as well.
Perhaps most notable, though, was the drop in the sales of a vehicle that is as ubiquitous as they come — the Toyota Corolla Family. Last August, auto sales tracking website GoodCarBadCar listed the Model 3 as the 5th best-selling passenger car in the United States, directly behind the Toyota Camry, Honda Civic, Honda Accord, and the Toyota Corolla Family. Toyota revealed that the Corolla Family sold 20,797 units in September, a ~20% decline over its sales in August, when 26,155 units of the vehicles were sold. If the 22,000-unit estimate for the Model 3’s September sale proves accurate, then Tesla’s first attempt at a mass-market electric car might have just dethroned one of America’s favorite low-cost automobiles.
What is particularly impressive with the Model 3 is that the vehicle is priced higher than its competitors at the top of the passenger car segment. If the Model 3 did beat the Corolla Family’s September sales numbers, it would mean that the electric car, whose selling price currently averages $60,000 (only premium variants are available for now), just outsold a vehicle that tops out at $22,730 (Corolla Family XSE). With Tesla seemingly setting the stage for the $35,000 base Model 3, cars like the Honda Civic and the Toyota Camry could find themselves facing some steep competition.
Things are looking optimistic for Tesla’s next quarters. Gigafactory 1 is set to receive upgraded battery cell production lines from Panasonic, and new Grohmann machines are expected to make module production “three times faster and three times cheaper.” Wall Street analyst Romit Shah from Nomura Instinet also noted that the company’s numbers this past quarter could prove as Tesla’s break-even point. Shah further stated that when Tesla’s deliveries increase to about 100,000 vehicles per quarter, the company could be profitable and sustainable.
Investor's Corner
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
Tesla short seller Michael Burry, the subject of the film “The Big Short,” where he was portrayed by Steve Carell, has revealed he has opened a new bet against the stock.
In a new update to his Substack newsletter in a post titled “Trading Post June 30, 2026,” Burry revealed a new set of bets against Tesla, Caterpillar, NVIDIA, Applied Materials Inc., and the iShares Semiconductor ETF.
In regard to Tesla, Burry wrote:
“And finally I shorted Tesla at 416.22. Happy it jumped back to this level.”
This means Burry likely opened his new short position after the company’s recent rally on Wall Street, which saw Tesla shares sink in mid-May, only to recover to well over the $400 mark. Currently, shares trade at around $427.
The company saw a big Tuesday as shares climbed considerably, over 10 percent. The size of the Tesla short was not provided, nor did Burry give any information on the position’s structure, the number of shares, dollar value, or whether options were used in the short.
The Tesla and SpaceX merger everyone is talking about is quietly building
Over the years, Burry has been one of the more vocal critics of Tesla, calling its share price “media inflated,” and saying it was “ridiculously overvalued” as recently as December.
The company has largely transitioned away from being known as an automotive company and instead is much more widely regarded as an AI play, mostly due to its Full Self-Driving efforts, Optimus robot development, and data collection related to both.
This has not pulled those skeptics away from being vocal about their distaste for how Tesla is valued, but there’s no denying that the company is a global force in many things, including sustainable energy, automotive, and AI.
Wedbush Securities is initiating stock coverage on SpaceX (NASDAQ: SPCX), marking the first comments on the company since it went public several weeks ago. Wedbush and its analyst handling coverage, Dan Ives, are widely bullish on fellow Musk company Tesla (NASDAQ: TSLA).
Ives wrote his first note initiating coverage of SpaceX shares on Wednesday with a $190 price target and an ‘Outperform’ rating. The firm believes the company is well positioned off of its IPO because of its wide array of projects, including AI compute power and infrastructure, connectivity projects, and launches.
“We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity,” Ives wrote, “Starship launches leading to a demand flywheel and increasing deal flow for its Colossus clusters.”
Elon Musk called it Epic: The full story of SpaceX’s Starship Flight 12
Wedbush leans heavily on Starlink, which they say is the “profitability driver given the strength of its recurring revenue base of ~12 million subscribers as of June 5th.” Ives believes Starlink is still in the “early innings” of penetrating the global telecommunications and broadband market, as it only holds less than a 1 percent share. However, this number is sure to increase over time.
It also highlights the importance of Starship, which it says is an “essential layer” of SpaceX’s overall success. SpaceX developing and displaying the ability to reuse rockets is a major cost and reliability advantage “as it reduces the necessary hardware launch costs while generating a feedback loop for future flights to improve their launch flight rate without accelerating capex spend.”
Finally, SpaceX’s recent AI/Compute projects are also very elementary, Ives writes. It is worth mentioning Wedbush said its $190 price target is derived from a valuation forecast that sees the company yielding roughly $2.48 trillion of implied enterprise value.
There are also some factors that Wedbush did not take into account with its initial coverage. The firm wrote in the note:
“We note that there is optional value coming from Starship’s accelerating scale towards sub-$200/kg unit economics, orbital data centers, and enterprise AI monetization as these factors could drive meaningful upside but these face major hurdles, so we do not take that into account with our valuation.”
SpaceX shares are down just over 2 percent today, trading at around $167 at the time of publication.
For years, there have been images and videos across social media platforms that have reminded me of when I was a 15-year-old kid teased by “Xbox 720” videos on YouTube. These videos are of the supposed “Tesla Phone” that Elon Musk was secretly developing in between leading Tesla with its electric cars and SpaceX with its reusable rockets.
Would you buy a Tesla phone ? pic.twitter.com/aaTwvvIJit
— Tesla Owners Silicon Valley (@teslaownersSV) October 6, 2023
Although Musk has put those rumors to bed several times, it was never completely out of the realm that he could get involved in cell phones in some capacity. Think outside the box and more macro-level, though. Instead of reinventing the computer, Musk reinvented connectivity by developing Starlink with SpaceX.
It could be something similar, TD Cowen analyst Gregory Williams said in a note last week, where he hinted SpaceX could be gathering some steam to acquire T-Mobile.
Williams said it would be the “clear choice” for SpaceX if it decided to go through with a network acquisition. He also suggested AT&T.
The move would be possible through selling more of its own stock, which would help SpaceX raise the money to purchase T-Mobile, which would cost roughly $300 billion. It could be one of the moves SpaceX makes post-IPO in terms of an acquisition: it already acquired Cursor AI for $60 billion.
Other analysts, like Dan Ives of Wedbush, believe SpaceX and Tesla will eventually merge into one anyway, and that conglomeration could come as soon as this year, some have said.
The implications of SpaceX purchasing T-Mobile are massive. A combined entity would create a truly ubiquitous network: T-Mobile’s terrestrial 5G towers and Starlink’s growing constellation of Direct-to-Cell satellites. This would essentially eliminate dead zones across the U.S. and potentially globally.
SpaceX would instantly become a full-scale facilities-based carrier with satellite differentiation; a huge advantage. This would pressure AT&T and Verizon heavily.
There are also concerns like a potential reduction in long-term competition, and of course, a deal of that size would face intense scrutiny from government agencies.
The strategic fit is compelling due to the existing Starlink–T-Mobile partnership and complementary technologies (space + terrestrial). It could create a dominant integrated communications player. However, the regulatory, financial, and execution hurdles are enormous — this remains highly speculative with no indication SpaceX is actively pursuing it right now.
Tesla Optimus project fires up as Musk sees production line progress
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
