Investor's Corner
Tesla registers over 10,000 new Model 3 VINs as Dual Motor production ramp continues
Tesla has registered two large batches totaling more than 10,000 new Model 3 VINs over the weekend, in what appears to be a sign of a renewed production push for the electric sedan. Both batches, the first being 2,625 registrations and the other being 7,903, are estimated to be comprised of dual motor AWD vehicles.
#Tesla registered 7,903 new #Model3 VINs. ~100% estimated to be dual motor. Highest VIN is 89107. https://t.co/OZqpp8nPjs
— Model 3 VINs (@Model3VINs) August 5, 2018
#Tesla registered 2,625 new #Model3 VINs. ~88% estimated to be dual motor. Highest VIN is 81204. https://t.co/SVarfCqPe5
— Model 3 VINs (@Model3VINs) August 4, 2018
With the addition of this weekend’s 10,528 new Model 3 filings, Tesla has now registered a total of 89,107 vehicles since the electric car started production last year. These latest filings are among Tesla’s most significant yet, considering that the company’s VIN registrations only went past the 10,000-mark near the end of January, roughly six months into the electric car’s production.
During Tesla’s Q2 2018 earnings call, CEO Elon Musk stated that Tesla was able to maintain the Model 3’s 5,000/week production rate across multiple weeks in July. Musk’s statement about the Model 3’s production falls in line with the trend displayed by VIN registrations during the first two weeks of the month. Immediately after the beginning of Q3 2018, Tesla went on a VIN-filing spree, registering 19,000 new Model 3 VINs in the first half of July.
During the latter half of last month, however, Tesla’s VIN filings plateaued, with the company registering only a few vehicles at a time until this weekend. Quite interestingly, these last two big batches of VIN filings also corresponded to dual motor variants of the Model 3. Twitter watchdog group @Model3VINs initially estimated the first batch of 2,625 Model 3 VINs to include Long Range RWD variants of the electric car, but in the following update, the group noted that all the filings appeared to be dual motor.
Tesla has only started rolling out the dual motor AWD and Performance variants of the Model 3 recently. Nevertheless, Tesla worldwide head of sales Robin Ren stated during the second quarter earnings call that the dual motor AWD and Performance Model 3’s combined orders are now more than the orders for the vehicle’s Long Range RWD variant. The Tesla executive further noted that interest in the Model 3 remains high, with the company having 60,000 test drive requests for the electric sedan in the United States alone.
If Robin Ren’s statements and the recent Model 3 VIN filings are any indications, it appears that Tesla’s push to upsell the higher-end variants of the electric car to consumers is starting to pay off. Tesla, after all, stopped anti-selling the vehicle after the end of Q2 2018, offering test drives to customers and promoting the Model 3 Performance. In a Twitter post, Elon Musk also encouraged reservation holders to test drive the Model 3 Performance even if they do not have orders for the top-tier vehicle.
With its 5,000/week target for the Model 3’s production being met, Tesla is now aiming to sustain and increase its manufacturing capability for the electric car. During his opening remarks in the Q2 2018 earnings call, CEO Elon Musk stated that Tesla is aiming to produce 7,000 vehicles per week throughout Q3 2018. Musk also noted that Tesla is expecting its ramp to 10,000 Model 3 per week to involve only a “tiny fraction” of the CapEx used when it ramped the vehicle to 5,000 units per week.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
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