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 Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
Will Tesla thrive without the EV tax credit? Five reasons why they might
Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Tesla discloses interesting collaboration partner for Supercharging
Tesla CEO Elon Musk confirms Robotaxi safety monitor removal in Austin: here’s when
