Investor's Corner
Worldwide Tesla Model X deliveries are more important than ever

Tesla began its delivery of the Model X beyond US borders to customers across Canada, Europe and China towards the end of Q2 which are good indications that the company has finally gotten a handle on the production gremlins that have plagued the introduction of the unique electric crossover. But with the recent Q2 report that Tesla fell short of its quarterly guidance, being able to fulfill deliveries of the Model X couldn’t come at a more important time.
In light of the recent negative events that have continued to beat down the stock, including reports of quality issues the Model X is facing – Tesla recently settled a lemon law suit filed by a Model X owner – the company will need to curb investor skepticism about how much of the Model X will be part of the original equation of delivering 80,000 to 90,000 cars this year. If it can’t, that will put a cloud over its stated plan of building 500,000 cars by 2020.
Daniel Sparks at The Motley Fool reminds us that Tesla CEO Elon Musk once stated that 40% of Q2 production numbers would be the Model X. Q1 saw 16% of deliveries attributed to the Model X after Tesla was plagued by supplier parts shortages, while the most recent quarter saw an uptick to 32% of total deliveries being the Model X. The company delivered 9,745 Model S and 4,625 Model X in Q2.
Though Tesla produced 18,345 vehicles in the second quarter, down from its guidance of 20,000, the production number still represents an increase of 20% over the previous quarter. An unusually high number of cars in transit at the end of the quarter — 5,150 — accounts for the difference between the number of cars produced and the number delivered. By comparison, only 2,615 were in transit at the end of Q1. The vehicles in transit now are expected to be delivered early in the third quarter.
Tesla expects output to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4. In total, it expects to produce and deliver about 50,000 vehicles during the second half of 2016. That’s as many cars as it delivered in all of 2015.
Hitting its targets for this year will be difficult. With combined deliveries for Q1 and Q2 of 16,000 and 14,300 cars respectively, Tesla will need to deliver an average of 25,000 vehicles in Q3 and Q4 to reach its 2016 goals. Whether the Model X will be a success – Musk has called it “the best car ever” – or continue to plague the electric car company with issues remains to be seen, but the investment community will be watching carefully on the vehicle makeup of its total production and delivery count. How many of it will be the Model X?
Combined with worries that the company’s surprise announcement that it intends to purchase SolarCity for $2.8 billion is distracting Tesla from focusing on its core business. The thinking among analysts is that Tesla stock will be under pressure this week as the market frets about the lower than expected Q2 delivery numbers.
Investor's Corner
Tesla gets $475 price target from Benchmark amid initial Robotaxi rollout
Tesla’s limited rollout of its Robotaxi service in Austin is already catching the eye of Wall Street.

Venture capital firm Benchmark recently reiterated its “Buy” rating and raised its price target on Tesla stock (NASDAQ: TSLA) from $350 to $475 per share, citing the company’s initial Robotaxi service deployment as a sign of future growth potential.
Benchmark analyst Mickey Legg praised the Robotaxi service pilot’s “controlled and safety-first approach,” adding that it could help Tesla earn the trust of regulators and the general public.
Confidence in camera-based autonomy
Legg reiterated Benchmark’s belief in Tesla’s vision-only approach to autonomous driving. “We are a believer in Tesla’s camera-focused approach that is not only cost effective but also scalable,” he noted.
The analyst contrasted Tesla’s simple setup with the more expensive hardware stacks used by competitors like Waymo, which use various sophisticated sensors that hike up costs, as noted in an Investing.com report. Compared to Tesla’s Model Y Robotaxis, Waymo’s self-driving cars are significantly more expensive.
He also pointed to upcoming Texas regulations set to take effect in September, suggesting they could help create a regulatory framework favorable to autonomous services in other cities.
“New regulations for autonomous vehicles are set to go into place on Sept. 1 in TX that we believe will further help win trust and pave the way for expansion to additional cities,” the analyst wrote.
Tesla as a robotics powerhouse
Beyond robotaxis, Legg sees Tesla evolving beyond its roots as an electric vehicle maker. He noted that Tesla’s humanoid robot, Optimus, could be a long-term growth driver alongside new vehicle programs and other future initiatives.
“In our view, the company is undergoing an evolution from a trailblazing vehicle OEM to a high-tech automation and robotics company with unmatched domestic manufacturing scale,” he wrote.
Benchmark noted that Tesla stock had rebounded over 50% from its April lows, driven in part by easing tariff concerns and growing momentum around autonomy. With its initial Robotaxi rollout now underway, the firm has returned to its previous $475 per share target and reaffirmed TSLA as a Benchmark Top Pick for 2025.
Elon Musk
Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake
A Swedish pension fund is offloading its Tesla holdings for good.

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.
The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.
Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.
However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:
“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”
Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.
Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

(Photo: Tesla)
There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.
Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.
AP7 did not list any of the current labor violations that it cited as its reason for
Investor's Corner
xAI targets $5 billion debt offering to fuel company goals
Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.
Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.
According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.
Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.
Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.
As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.
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