Investor's Corner
Tesla gets another ‘Outperform’ rating amid China’s upcoming tariff suspension
Tesla stock (NASDAQ:TSLA) has received yet another “Outperform” rating from Wall Street, this time coming from Wedbush, which recently launched coverage of the electric car maker. The new vote of confidence comes amidst news that China has agreed to enact a 3-month suspension for the additional 25% tariffs it placed on cars and parts entering the country from the United States.
Wedbush analysts led by Dan Ives expressed their optimism on Tesla in a recent note, echoing Elon Musk’s statements about the company having a compelling product roadmap for years to come. The analysts pointed out that Tesla would likely be a driving force for the automotive sector’s shift towards sustainable transportation, with the Model 3 leading the charge.
“The company has the most impressive product roadmap out of any technology/auto vendor around and will be a ‘game-changing’ driving force for the EV transformation over the next decade with Model 3 front and center,” the Wedbush analysts noted.
Ives further noted that Tesla has a “golden opportunity” to ramp the sales of the Model 3 in 2019, which would likely “translate into massive free cash flow and profitability” for the company. The Wedbush analysts placed a $440 price target on TSLA stock as well, representing a 16% upside from Thursday’s closing price.
As Tesla gains another vote of confidence from Wall Street, the company’s business in China seems to be getting a boost for the coming quarter as well. In a recent announcement, China’s State Council Customs Tariff Commission stated that it was suspending the extra 25% tariffs it placed on cars and parts being imported from the United States as a result of the US-China trade war. The import tariff suspension is set to last three months, taking effect on January 1, 2019.
In response to the Chinese government’s announcement, Tesla has adjusted the pricing of the Model S and Model X in the country. Tesla was able to adjust the price of its electric cars by as much as 105,000 yuan ($15,200) for the Model S 100D. The Model S75D’s price received a $6,000 adjustment, while the Model X 75D’s price was reduced by $10,000.
Update with English version & USD pricing table.
Tesla officially lowered the prices (Model S And X) in China🇨🇳: some models have cut prices by more than $15K USD, a drop of 11%Q1 2019 sales numbers (China) will be insane!!$TSLA #Tesla #China #TeslaChina pic.twitter.com/luHQbyZNN3
— vincent (@vincent13031925) December 14, 2018
The upcoming suspension of the trade tariffs for American-made cars bodes well for Tesla. The additional duties have weighed down the company’s business in the region during the past few months, pushing Tesla to roll out a program last month that allowed it to “absorb” part of the 40% import tariff, making its electric cars more affordable.
Without the additional import tariffs, though, Tesla’s performance in China is quite impressive. Prior to the start of the US-China trade war, China’s Customs Tariff Commission under China’s cabinet announced that it would reduce car import duties from 20-25% to just 15%. Similar to the price adjustments rolled out today, Tesla promptly cut the prices of its vehicles in its stores across the country then. The response from the market was strong and immediate, resulting in a Shanghai Tesla store selling out its entire Model X 75D inventory in 24 hours.
As of writing, Tesla shares are trading -1.50% at $371.16 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Elon Musk will give ‘every kid in America’ a SpaceX share in 2027
Elon Musk said he is planning to give “every one of his SpaceX shares to every kid in America” in 2027, stating that “this will be the first of many.”
SpaceX went public earlier this year, and its stock price has been relatively stable since leveling off shortly after its IPO. Based on its current price, it’s a gift of just over $10 billion to children across the United States.
It appears to be closely related to President Donald Trump’s bank accounts for children, which were set up earlier this year as Trump Accounts.
Just hours earlier, Anthropic had announced the establishment of its Anthropic Public Benefit Fund, “a new wholly-owned entity dedicated entirely to public benefit.” Musk responded by stating he recommended “giving the shares directly to the public,” and that he would be doing it that way.
Just a little bit later, Musk said children across the U.S. would be getting a share from him:
Next year, I will give one of my SpaceX shares to every kid in America.
This will be the first of many.
— Elon Musk (@elonmusk) October 19, 2026
There are roughly 70 million children, meaning someone under the age of 18, in the United States, according to the Federal Interagency Forum on Child and Family Statistics. Musk’s ownership of SpaceX stock shows he has around 849 million Class A shares of SpaceX stock, according to filings with the SEC.
Investor's Corner
SpaceX’s biggest earnings test yet lands Tuesday, and Tesla shareholders should be watching
SpaceX reports earnings Tuesday as Wall Street watches AI spending, Starlink growth and Tesla merger
SpaceX reports third quarter results after the market closes Tuesday, with a webcast at 4:30 p.m. ET streamed on X, and Tesla follows a day later. Bloomberg consensus, cited by Pepperstone, calls for revenue of $12.89 billion, adjusted EBITDA of $6.62 billion and adjusted EPS near $0.15. That would be about 65% growth from the second quarter and SpaceX’s first profitable quarter since its IPO. Analysts expect roughly $6.4 billion from AI and $4.9 billion from Starlink, which is projected to reach 14.3 million consumer subscribers. Capital spending is forecast at $19.6 billion, leaving free cash flow near negative $11.6 billion.
The numbers matter because SpaceX has spent months trying to win over a skeptical market. It priced its record IPO at $135, spiked to $225.64, then sank near $105 in early August. Friday’s close of $146.03 sits about 28% below the June high. The Q2 report beat on revenue at $7.8 billion and put Starlink at 12 million subscribers, but $18.4 billion of capex hurt the stock. Since then SpaceX reached orbit on Starship Flight 14 with 26 Starlink V3 satellites, agreed to buy 800 MHz spectrum for about $8 billion as part of its Starlink Mobile push, and signed a fourth compute hosting deal in four months worth roughly $13 billion a year from December. Management is targeting more than 2 gigawatts of compute by year end and a $100 billion annualized revenue run rate. Evercore ISI, which raised its target to $275, said the quarter may be judged more on those targets than the reported figures
All of this sits under the Tesla merger question. Barclays analyst Dan Levy expects an all stock deal in which SpaceX buys Tesla at a premium, using reference values of $2.1 trillion and $1.5 trillion, and said an announcement would need to come by late October or early November to be voted on at Tesla’s December 6 annual meeting. Barclays estimates Musk would hold about 37% of the combined company and 56% of the votes. Musk said in July that combining companies cannot be discussed on an earnings call, but an investor question asking when SpaceX will merge with Tesla is sitting on SpaceX’s Q&A platform, and Teslarati has tracked how the Roadster demo revived the talk.
If a deal happens, Tuesday’s result would effectively set the price Tesla holders would receive. Their shares would convert into SpaceX stock, along with exposure to a company with a heavy investment on AI, while Tesla itself expects 2026 capex above $25 billion. A strong quarter and calmer spending would make that exchange easier to sell. Another round of heavy capex and a falling stock would make it harder.
Investor's Corner
Tesla’s flying Roadster just revealed something bigger than the car
Analysts say the Roadster demo puts a Tesla and SpaceX merger back on the table.
The Roadster unveiling near Waco ended Thursday night, and by Friday morning much of the investor reaction had less to do with the car than with who owns the rocket technology inside it.
Wedbush analyst Dan Ives said the event “puts the Tesla/SpaceX relationship on the table in a tangible way,” pointing to the propulsion, pressure vessel and control hardware sitting on a Tesla product. Gene Munster of Deepwater Asset Management called the demo “a ridiculous display of engineering” with “no commercial value” beyond embarrassing traditional automakers, though he said it showed Musk wants the two companies together.
The more specific forecast came a day earlier from Barclays. Analyst Dan Levy told clients a deal could be announced before Tesla’s annual meeting, which must happen by December 6, and that an announcement in late October or early November could make shareholder approval harder. Barclays expects SpaceX to be the buyer in an all stock deal, with Tesla holders receiving SpaceX shares at a premium, based on market values of roughly $2.1 trillion for SpaceX and $1.5 trillion for Tesla. If nothing lands around the meeting, the bank still sees an announcement within 6 to 12 months.
The Roadster demo just added more weight to merger speculations. Tesla’s demo used cold gas thrusters and pressure tanks of the kind SpaceX uses on Falcon 9, and Musk described the car as a collaboration between Tesla and SpaceX engineers, as we mentioned in our breakdown of the three Roadster configurations.
Musk has not publicly addressed a deal since the event, as far as we have seen. His most direct answer remains the one he gave at the All In Summit, when he said that with so much collaboration, “who can imagine what action one might take” without ruling anything out. Ives has held to a 2027 timeline since his March note, and Musk pushed back on the China piece of the speculation when ARK floated a year end announcement in August.
The next test is Tesla’s third quarter earnings call on October 21. However, we recall in July that Musk told analysts, “we can’t talk about combining companies and that kind of thing on an earnings call,” so a clear answer wouldn’t be expected.