Investor's Corner
Tesla GigaFactory Economics: Why its critical to $TSLA
Forbes says that success of the GigaFactory is critical to any future increase in Tesla share price. It says production savings will boost profit margins.

Early construction of the Tesla Gigafactory in Reno, NV from Feb, 2015. [Source: Reno Sparks Tahoe Homes]
At present, the lithium to make lithium ion batteries comes mostly from South America. From there it gets shipped to North America for refining and processing. Then it goes to Japan or South Korea for further refining and processing. Finally, it comes back to North America as part of batteries that will be installed in an electric car. That car will then be sold in America, Europe or China. A first year business administration student can tell you there are huge inefficiencies built into that system.
According to Forbes, the genius of the Tesla plan is to consolidate as many of those steps as possible under the roof of its GigaFactory in Nevada. Forbes calculates that even if consolidation only shaves a few percentage points off the cost of each step in the process, the cumulative effect will be significant savings. It estimates savings of 10% are possible in both supply chain costs and labor costs. Then, if the volume of Tesla automobile sales increases, economies of scale should account for a further 10% reduction, for total savings of 30%.
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Based on the prices quoted by Tesla at the roll out of its PowerWall residential battery system in April, analysts believe its cost of manufacture is already at roughly $250 per kilowatt hour. Shaving 30% off that number would drive the cost below $200 per kilowatt hour, and that’s that point where many observers believe electric cars can be price competitive with cars powered by conventional internal combustion engines.
Tesla says it plans to sell 500,000 electric cars a year by 2020. Forbes predicts the product mix to make that number possible will be 20% Model S sedans, 15% Model X SUVs, 5% Roadsters and 60% Model III vehicles. At that sales volume, it estimates the company will realize a 10% gain in its gross profit margins, propelling the company stock 40% higher than its present price target.
But there’s one thing the Forbes report doesn’t take into consideration — the impact on profits from selling batteries for purely non-automotive uses such as grid storage systems coupled with commercial, industrial and residential uses.Large companies like Walmart and Target have already signed deals to use Tesla storage batteries. Amazon will rely on Tesla batteries at its new western service center. And Advanced Microgrid Solutions has just announced an agreement to buy enough Tesla batteries for up to 500 megawatts of electrical storage, according to Bloomberg Business.
AMS CEO Susan Kennedy told Bloomberg, “What I like about the Tesla batteries is that they’re so versatile. But we’re technology agnostic. We can choose any type of technology. We intend to use Tesla batteries on a huge number of our projects going forward.” Meanwhile, Mercedes Benz announced this week that it is jumping into the battery storage business in a big way with its Deutsche ACCUmotive division.
There are billions in profits to be made in stationary battery storage systems over the next 20 years, as the world of electrical power transitions away from fossil fuels to distributed renewables. It may turn out that Tesla’s battery business could generate more profits than its automobile business. In which case, Forbes’ prediction of a 40% increase in Tesla share price may prove to be entirely too conservative.
Source: Forbes
Investor's Corner
Tesla enters new stability phase, firm upgrades and adjusts outlook
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
Tesla is entering a new phase of stability in terms of vehicle deliveries, one firm wrote in a new note during the final week of October, backing its position with an upgrade and price target increase on the stock.
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
While most firms are interested in highlighting Tesla’s future growth, which will be catalyzed mostly by the advent of self-driving vehicles, autonomy, and the company’s all-in mentality on AI and robotics, Pozdnyakov is solely focusing on vehicle deliveries.
The analyst wrote in a note to investors that he believes Tesla’s updated vehicle lineup, which includes its new affordable “Standard” trims of the Model 3 and Model Y, is going to stabilize the company’s delivery volumes and return the company to annual growth.
Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings
Tesla launched the new affordable Model 3 and Model Y “Standard” trims on October 7, which introduced two stripped-down, less premium versions of the all-electric sedan and crossover.
They are both priced at under $40,000, with the Model 3 at $37,990 and the Model Y at $39,990, and while these prices may not necessarily be what consumers were expecting, they are well under what Kelley Blue Book said was the average new car transaction price for September, which swelled above $50,000.
Despite the rollout of these two new models, it is interesting to hear that a Wall Street firm would think that Tesla is going to return to more stable delivery figures and potentially enter a new growth phase.
Many Wall Street firms have been more focused on AI, Robotics, and Tesla’s self-driving project, which are the more prevalent things that will drive investor growth over the next few years.
Wedbush’s Dan Ives, for example, tends to focus on the company’s prowess in AI and self-driving. However, he did touch on vehicle deliveries in the coming years in a recent note.
Ives said in a note on October 2:
“While EV demand is expected to fall with the EV tax credit expiration, this was a great bounce-back quarter for TSLA to lay the groundwork for deliveries moving forward, but there is still work to do to gain further ground from a delivery perspective.”
Tesla has some things to figure out before it can truly consider guaranteed stability from a delivery standpoint. Initially, the next two quarters will be a crucial way to determine demand without the $7,500 EV tax credit. It will also begin to figure out if its new affordable models are attractive enough at their current price point to win over consumers.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
Elon Musk
Tesla analyst: ‘near zero chance’ Elon Musk’s $1T comp package is rejected
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
A Tesla analyst says there is “zero chance” that CEO Elon Musk’s new compensation package is rejected, a testament to the loyalty and belief many shareholders and investors have in the frontman.
Tesla investors will vote on November 6 at the annual Shareholder Meeting to approve a new compensation package for Musk, revealed by the company’s Board of Directors earlier this month.
The package, if approved, would give Musk the opportunity to earn $1 trillion in stock, an ownership concentration of over 27 percent (a major request of Musk’s), and a solidified future at the company.
The Tesla Community on X, the social media platform Musk bought in 2023, is overwhelmingly in favor of the pay package, though a handful of skeptics remain.
Nevertheless, the big pulls of this vote are held by proxy firms and other large-scale investors. Two of them, Institutional Shareholder Services (ISS) and Glass Lewis, said they would be voting against Musk’s proposed compensation plan.
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
Today, the State Board of Administration of Florida (SBA) said it would vote in favor of Musk’s newly-proposed pay day, making it the first large-scale shareholder to announce it would support the CEO’s pay.
One analyst said that Musk’s payday is inevitable. Gary Black of the Future Fund said today there is a “near-zero chance” that shareholders will allow Musk’s pay package to be rejected:
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
He added an alternative perspective from Wedbush’s Dan Ives, who said that he had a better chance of starting for the New York Yankees than the comp package not being approved.
There is a near zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting. As Wedbush analyst Dan Ives (@divestech) colorfully put it in a Yahoo Finance interview on October 23rd: “I have a better chance of starting for…
— Gary Black (@garyblack00) October 27, 2025
Black’s the Future Fund sold its Tesla holdings earlier this year. He explained that the firm believed the company’s valuation was too disconnected from fundamentals, citing the P/E ratio of 188x and declining earnings estimates.
The firm maintained its $310 price target, and shares were trading at $356.90 that day.
Shares closed at $452.42 today.
The latest predictions from betting platform Kalshi have shown Musk’s comp package has a 94 percent chance of being approved:
— Kalshi (@Kalshi) October 20, 2025
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