Investor's Corner
TSLA analyst summarizes Model 3 ramp: “Tesla failed on its original plan, but achieved a world-class result”
Elon Musk was not exaggerating when he described the Model 3 ramp as a “bet-the-company” situation. After handing over the first 30 units of the Model 3 in July 2017, Elon Musk candidly welcomed Tesla’s employees to “production hell.” As the following year would prove, the vehicle’s ramp would be exactly that — a challenging, upward climb filled with multiple painful bottlenecks.
Elon Musk mentioned during an episode of the Recode Decode podcast last month that Tesla is now at a point where it is no big deal for the company to produce 5,000 Model 3 per week. Musk noted, though, that Tesla’s employees had to put “excruciating effort” in refining and improving the Model 3 ramp to get to where it is today. The result of this effort was recently described by a Wall Street analyst after a visit to the Fremont factory.
Pierre Ferragu of New Street Research is one of Tesla’s most prominent supporters in Wall Street. The analyst, who holds a $530 price target on the electric car maker, stated in a note on Tuesday that Tesla made a lot of mistakes during the Model 3 ramp. Ferragu even described the Fremont factory as a “crowded mess” in its current state due to the facility’s complexities. An example of this was an intricate conveyor belt system that was eventually scrapped and replaced with human workers, resulting in the process being 30% less productive than what Tesla initially anticipated.
While Tesla’s failures with the Model 3 ramp were notable, Ferragu stated that it is these failures that make Tesla a company that is worth supporting. The Wall Street analyst wrote that Tesla’s production processes are only bound to get better from this point, particularly as the company is in a constant state of improvement. Ferragu pointed out that the lessons that Tesla learned from its initial failures with the Model 3 ramp would likely result in future sites for the vehicle’s production — such as Gigafactory 3 in Shanghai — to be optimized faster and more efficiently.
“All these (mistakes) feed a lot of (the) bear argument on the company. We see it the exact opposite way. Failure is where one learns the most. By shooting way too high, Tesla failed on its original plan, but achieved a world-class result. The next production sites will be much more efficient, and will ramp very rapidly.”
-->The Wall Street analyst’s optimistic outlook on Tesla comes amidst yet another vote of confidence from CFRA, an independent investment research firm. In a recent note to its clients, CFRA raised its price target for the electric car maker to $420 per share, an 11% increase from its previous PT of $375. The firm stated that its updated price target was due to the “limited impact” of competing electric cars in 2019, as well as improving headwinds in China. Just like the New Street Research analyst, CFRA also cited further improvements and efficiencies in Model 3 production as one of the reasons behind its positive stance on Tesla.
While Tesla has already achieved milestones in its Model 3 ramp, it should be noted that the company is only halfway towards its target numbers for the electric sedan’s production. Tesla eventually aims to manufacture 10,000 Model 3 per week, particularly as the vehicle starts getting delivered to territories such as Europe and Asia. In this light, Ferragu stated in his note that Tesla’s Model 3 ramp to 10,000 per week would likely be a far less painful process for the company.
“The road to 7,000 units per week seems easy, and limited capital expenditures will be required (in the low tens of millions) to get to 10,000,” the analyst wrote.
As of writing, Tesla stock (NASDAQ:TSLA) is trading down 1.70% at $353.58 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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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.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
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