Investor's Corner
Tesla’s Model 3 production ramp is here, and the US auto market is starting to feel it
Since hitting its Q2 target of producing 5,000 Model 3 per week, Tesla appears to have accelerated its efforts to build and deliver the electric car to as many reservation holders as possible. The vehicle’s ramp has been anything but smooth over the past year, but now that Tesla is focusing on sustaining its production of the car, it seems like the results of the Model 3 push are finally starting to bear fruit.
Tesla noted in its Q2 2018 production and delivery report that the Model 3 had a line of about 420,000 reservations as of the final week of June. Deliveries of the Model 3 rose steadily since Tesla started ramping the production of the vehicle. Over Q1 and Q2, sales of the electric sedan increased, culminating in July when Tesla is estimated to have sold as many as 14,250 Model 3 in one month.
With such numbers, the Model 3 became the best-selling electric car in the United States in July, bar none. The rise of the Model 3 was so prominent that last month, it was listed as 7th place in GoodCarBadCar‘s list of America’s Top 20 Best Selling Cars, which included gas-powered vehicles like the Toyota Camry and the Honda Civic. These are vehicles that have held their places in the US’s auto industry for years, and the vast majority of them are more affordable than the Model 3.
Yet, despite this, the Model 3’s sales show that more and more people are starting to commit to Tesla’s electric car. In the company’s Q2 2018 earnings call, Tesla global head of sales Robin Ren stated that the top five vehicles being traded in for a Model 3 were rather surprising, as they were comprised of mostly lower-priced cars such as the Toyota Prius, BMW 3 Series, Honda Accord, Honda Civic, and the Nissan Leaf. Among these vehicles, only the BMW 3 Series is an actual competitor in the midsize luxury segment. The other four are from a more affordable price point.
According to Elon Musk, these trends in the sales of the Model 3 suggest that customers are quite open to spending a little bit more than their usual budget to purchase the electric car. This, Musk believes, is encouraging overall.
“It’s just interesting that people are trading up into a Tesla, so they’re choosing to spend more money on a Tesla than their current car, just based on the trade-in values. A Civic is a very inexpensive car compared to particularly the Model 3 today. So that’s promising from a market access standpoint,” Musk said.
Tesla’s Model 3 ramp appears to be well on its way to sustaining the optimum manufacturing level displayed by the company during its “burst production week” at the end of June. Apart from Tesla announcing that it was able to maintain its 5,000/week Model 3 target in “multiple weeks” in July, the company has also registered an astounding 16,000 new Model 3 VINs in a seven-day period this August. That’s a number that took the company roughly eight months to achieve when the vehicle started production in mid-2017.
As the Model 3 continues to make its presence known in the US auto industry, Tesla appears to be looking into expanding the Model 3’s reach to other countries. Deliveries to Canada have already started in Q2, and just recently, Tesla also announced that it would be offering the Model 3 for viewing in Australia and New Zealand. The company also showcased the Model 3 at the 2018 Goodwood Festival of Speed, where it attracted a good deal of attention from the festival’s attendees.
What then, of competing electric vehicles from other manufacturers? The Model 3’s main rival, the well-reviewed Chevy Bolt, has appears to have plateaued its sales in 2018. Estimates of the Chevy Bolt’s sales this year show that the vehicle has likely sold around 1,100-1,700 units every month since January, putting it below the Model 3’s numbers in 2018 so far. By July, the Model 3 is estimated to have outsold the Chevy Bolt EV 12:1.
Particularly notable is that Tesla’s production ramp for the Model 3 is still just halfway towards its actual target. Tesla aims to eventually produce 10,000 Model 3 per week — a pace the company is seeking to achieve sometime next year. It took a very long time for Tesla to build up the Model 3’s lines to produce 5,000 vehicles per week, but with the milestone achieved, it appears that Tesla’s ramp for its most ambitious electric car is going nowhere but up. Once the Model 3 hits 10,000 per week, even America’s top-selling vehicles like the Toyota Camry could start seeing their sales get taken over by Telsa’s electric sedan.
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
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@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
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
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