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Tesla’s new Lathrop site nears completion amid Elon Musk’s Q4 Model 3 push

(Photo: Troopr1023/YouTube)

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Tesla’s 870,000 sq ft building in the city of Lathrop, CA continues to take shape, with the massive and rather mysterious facility’s roofing now being complete. The new Lathrop site’s progress comes amidst the electric car maker’s efforts to produce and deliver as many vehicles to customers before the end of December.

Tesla enthusiast and drone operator Troopr1023 noted in a YouTube upload that the facility is significantly more refined since his last flyover, which was conducted last November 18. During that time, the large building only had around 2/3 of its roofing installed, and there was very little work being done around the facility.

Apart from its full roofing, the areas of the facility where its numerous loading bays are located are now being overlaid with cement. A parking lot located in what appears to be the facility’s front end is also being constructed. The drone operator did note, though, that the spaces allotted for parking lots immediately around the site are rather few; thus, giving the impression that the facility would likely have relatively few employees.

Tesla is yet to disclose the purpose of the Lathrop facility, though speculations are abounding that the site might be used as a distribution center. Considering that the structure is built with numerous loading bays on each end, and considering that the size of each bay seems to be designed to fit a semi-trailer, it does seem plausible that the structure would be used in connection with Tesla’s vehicle distribution activities.

Even prior to the construction of the 870,000 sq ft building, Tesla’s presence in Lathrop was already notable. Local news agency Manteca Bulletin, for one, noted that the upcoming facility would be complimenting a 500,000 sq ft Tesla-owned site in the city. Lathrop is also home to one of the electric car maker’s loading hubs, which holds vehicles before they are shipped to other locations.

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Tesla’s progress in the construction of the Lathrop facility comes amidst the company’s efforts to produce and deliver yet another record number of vehicles this quarter. The electric car maker defied the odds in Q3 by posting a $312 million profit, and since then, Elon Musk has noted that Tesla should remain cash-flow positive in the coming quarters as well. With the end of Q4 at hand, and with the $7,500 federal tax credit set to expire at the end of the month, Tesla CEO Elon Musk has been encouraging potential buyers to purchase an electric car today.

In a recent series of tweets, Musk noted that Tesla is releasing inventory, display, and test drive vehicles for purchase. Musk even noted in a recent tweet that these vehicles, as well as cars that belonged to reservation holders who couldn’t take delivery before the year ended, would cost less. The bold CEO further added that orders for the Mid Range Model 3 should be delivered by the year’s end.

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Perhaps most notable, though, was an announcement that Musk recently made about the $7,500 federal tax credit. When asked by a Mid Range Model 3 reservation holder what would happen if an order is not fulfilled before the end of December, Musk noted that Tesla would cover the tax credit difference.

While Tesla is making progress on its US facilities and deliveries, the company is already laying the foundations for an even more aggressive ramp next year. In Europe, for example, reports have emerged that Tesla is preparing to ship 3,000 Model 3 per week for the region. The rollout of CCS-compatible Superchargers for the Model 3 have also begun. On the other side of the world, Gigafactory 3 in China continues to take shape, with local reports stating that the facility is progressing “one year ahead of schedule.”

Watch the Lathrop facility’s latest drone flyover in the video below.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Tesla could save $2.5B by replacing 10% of staff with Optimus: Morgan Stanley

Jonas assigned each robot a net present value (NPV) of $200,000.

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Credit: Tesla Optimus/X

Tesla’s (NASDAQ:TSLA) near-term outlook may be clouded by political controversies and regulatory headwinds, but Morgan Stanley analyst Adam Jonas sees a glimmer of opportunity for the electric vehicle maker. 

In a new note, the Morgan Stanley analyst estimated that Tesla could save $2.5 billion by replacing just 10% of its workforce with its Optimus robots, assigning each robot a net present value (NPV) of $200,000.

Morgan Stanley highlights Optimus’ savings potential

Jonas highlighted the potential savings on Tesla’s workforce of 125,665 employees in his note, suggesting that the utilization of Optimus robots could significantly reduce labor costs. The analyst’s note arrived shortly after Tesla reported Q2 2025 deliveries of 384,122 vehicles, which came close to Morgan Stanley’s estimate and slightly under the consensus of 385,086.

“Tesla has 125,665 employees worldwide (year-end 2024). On our calculations, a 10% substitution to humanoid at approximately ($200k NPV/humanoid) could be worth approximately $2.5bn,” Jonas wrote, as noted by Street Insider.

Jonas also issued some caution on Tesla Energy, whose battery storage deployments were flat year over year at 9.6 GWh. Morgan Stanley had expected Tesla Energy to post battery storage deployments of 14 GWh in the second quarter.

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Musk’s political ambitions

The backdrop to Jonas’ note included Elon Musk’s involvement in U.S. politics. The Tesla CEO recently floated the idea of launching a new political party, following a poll on X that showed support for the idea. Though a widely circulated FEC filing was labeled false by Musk, the CEO does seem intent on establishing a third political party in the United States. 

Jonas cautioned that Musk’s political efforts could divert attention and resources from Tesla’s core operations, adding near-term pressure on TSLA stock. “We believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” Jonas stated.

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Investor's Corner

Two Tesla bulls share differing insights on Elon Musk, the Board, and politics

Two noted Tesla bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

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Credit: Tesla

Two noted Tesla (NASDAQ:TSLA) bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

While Wedbush analyst Dan Ives called on Tesla’s board to take concrete steps to ensure Musk remains focused on the EV maker, longtime Tesla supporter Cathie Wood of Ark Invest reaffirmed her confidence in the CEO and the company’s leadership.

Ives warns of distraction risk amid crucial growth phase

In a recent note, Ives stated that Tesla is at a critical point in its history, as the company is transitioning from an EV maker towards an entity that is more focused on autonomous driving and robotics. He then noted that the Board of Directors should “act now” and establish formal boundaries around Musk’s political activities, which could be a headwind on TSLA stock. 

Ives laid out a three-point plan that he believes could ensure that the electric vehicle maker is led with proper leadership until the end of the decade. First off, the analyst noted that a new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” is necessary. He also stated that the Board should establish clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation, and a dedicated oversight committee must be formed to monitor the CEO’s political activities.

Ives, however, highlighted that Tesla should move forward with Musk at its helm. “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” he wrote, reiterating its Outperform rating on Tesla stock and $500 per share price target.

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Tesla CEO Elon Musk has responded to Ives’ suggestions with a brief comment on X. “Shut up, Dan,” Musk wrote.

Cathie Wood reiterates trust in Musk and Tesla board

Meanwhile, Ark Investment Management founder Cathie Wood expressed little concern over Musk’s latest controversies. In an interview with Bloomberg Television, Wood said, “We do trust the board and the board’s instincts here and we stay out of politics.” She also noted that Ark has navigated Musk-related headlines since it first invested in Tesla.

Wood also pointed to Musk’s recent move to oversee Tesla’s sales operations in the U.S. and Europe as evidence of his renewed focus in the electric vehicle maker. “When he puts his mind on something, he usually gets the job done,” she said. “So I think he’s much less distracted now than he was, let’s say, in the White House 24/7,” she said.

TSLA stock is down roughly 25% year-to-date but has gained about 19% over the past 12 months, as noted in a StocksTwits report.

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Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries

Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

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Credit: Tesla China

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report. 

Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.

Tesla’s Q2 results

Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.

In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.

Tesla’s stock is still volatile

Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump. 

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Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.

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