Investor's Corner
The Tesla Killer’s death and Elon Musk’s long-term play on batteries, vertical integration
At a press conference last year at Volkswagen’s global headquarters in Wolfsburg, Germany, VW Chairman of the Board Herbert Diess stated that “anything that Tesla can do, we can surpass.” The VW boss even noted that its dedicated MEB electric car architecture would give the company cost advantages at a scale that’s out of Tesla’s reach.
This year, the Tesla Model 3 is steadily making its presence known in the United States auto market. In September alone, the Model 3 was listed as the 4th best-selling passenger car in the US, beating the ubiquitous Toyota Corolla Family. Tesla also finished Q3 on a strong note, manufacturing a total of 80,142 electric cars including 53,239 Model 3, as well as delivering a total of 83,500 vehicles, comprised of 55,840 Model 3, 14,470 Model S, and 13,190 Model X. This Q4, Tesla seems poised to deliver and produce an even more impressive number of vehicles.
For years, Tesla skeptics have pointed at upcoming competition from legacy automakers as a reason for the impending fall of the electric car maker. Just like Herbert Diess, many of Tesla’s critics pointed out that legacy auto’s years of experience, as well as their network of factories, should allow them to leapfrog Tesla in the electric car market as soon as they decide to enter the electric car market.
As companies like Mercedes-Benz, Audi, Jaguar, and Porsche are learning today, though, it is not so simple to build a compelling electric car that’s capable of challenging Tesla’s premium vehicles in their respective segments. Mercedes-Benz, for one, has announced that the EQC — its plush competitor for the Model X — will adopt a gradual rollout due to possible warranty concerns over the vehicle’s battery and other electric car components. German news agency Bild am Sonntag recently noted that the Audi e-tron would be released later than expected as well, due to a software issue and ongoing discussions with its battery provider, LG Chem, which is allegedly adjusting the price of the vehicle’s batteries.
Even legacy carmakers that seem to be fully embracing the transition to electrified transport seem to be learning a lesson in designing and producing electric cars. Jaguar, for one, recently confirmed that the I-PACE has a range of 234 miles per charge, lower than the company’s initial estimates for the vehicle. Porsche, on the other hand, is preparing to build the Taycan, but even workers at its plant in Stuttgart, Germany have to pitch in to make the car a reality. Porsche head of production Albrecht Reimold, for one, noted that employees at the Taycan’s upcoming factory would not have regular salary increases for the next few years as the Taycan’s factory gets constructed.
With legacy automakers revealing their highly-anticipated Tesla competitors, and with each company running into challenges of their own, analysts are starting to retire myth of the “Tesla Killer.” Last month, Toni Sacconaghi of Bernstein, a known skeptic of the electric car maker, stated that the Model 3 faces “no credible competition” from legacy auto until at least 2020. More recently, Berenberg analyst Alexander Haissl reiterated a Buy rating on TSLA stock with a $500 price target, stating that fears over competition from legacy automakers are overblown. Haissl further noted that Tesla’s driving ranges and vehicle efficiencies are well ahead of the competition.
Perhaps the most notable death knell on the Tesla Killer myth came from known TSLA short-seller-turned-long Andrew Left of Citron Research; who pointed out that “there is NO Tesla killer. Competition is nowhere to be found, and no electric vehicle is slated to launch at the Model 3 price point until 2021.”
Ultimately, Tesla’s prominent lead in the electric car market is the culmination of Elon Musk’s long-term play on electric car batteries and the company’s vertical integration. Since Tesla is producing its own battery cells from Panasonic’s lines in Gigafactory 1, the company is saving itself from any of the issues currently being faced by Audi as it struggles to reach a deal with LG Chem for the e-tron’s batteries, or Mercedes-Benz as it deals with uncertainties over the EQC’s battery warranty. The deep integration of Tesla’s hardware and software also creates a unified user experience that is not unlike Apple, allowing the company’s electric cars to perform at their best and preventing issues such as those being faced by Jaguar with regards to the I-PACE’s apparent inefficiency.
The death of the Tesla Killer and the improvements in Tesla’s Model 3 ramp, together with the announcement that the Q3 2018 earnings call would happen on Wednesday, appear to have improved investor sentiment for the company’s stock. On Tuesday, Tesla stock (NASDAQ:TSLA) rose $33.19, ending the day at $294.14, up 12.72% from Monday’s close.
Investor's Corner
SpaceX IPO is coming, CEO Elon Musk confirms
However, it appears Musk is ready for SpaceX to go public, as Ars Technica Senior Space Editor Eric Berger wrote an op-ed that indicated he thought SpaceX would go public soon. Musk replied, basically confirming it.
Elon Musk confirmed through a post on X that a SpaceX initial public offering (IPO) is on the way after hinting at it several times earlier this year.
It also comes one day after Bloomberg reported that SpaceX was aiming for a valuation of $1.5 trillion, adding that it wanted to raise $30 billion.
Musk has been transparent for most of the year that he wanted to try to figure out a way to get Tesla shareholders to invest in SpaceX, giving them access to the stock.
He has also recognized the issues of having a public stock, like litigation exposure, quarterly reporting pressures, and other inconveniences.
However, it appears Musk is ready for SpaceX to go public, as Ars Technica Senior Space Editor Eric Berger wrote an op-ed that indicated he thought SpaceX would go public soon.
Musk replied, basically confirming it:
As usual, Eric is accurate
— Elon Musk (@elonmusk) December 10, 2025
Berger believes the IPO would help support the need for $30 billion or more in capital needed to fund AI integration projects, such as space-based data centers and lunar satellite factories. Musk confirmed recently that SpaceX “will be doing” data centers in orbit.
AI appears to be a “key part” of SpaceX getting to Musk, Berger also wrote. When writing about whether or not Optimus is a viable project and product for the company, he says that none of that matters. Musk thinks it is, and that’s all that matters.
It seems like Musk has certainly mulled something this big for a very long time, and the idea of taking SpaceX public is not just likely; it is necessary for the company to get to Mars.
The details of when SpaceX will finally hit that public status are not known. Many of the reports that came out over the past few days indicate it would happen in 2026, so sooner rather than later.
But there are a lot of things on Musk’s plate early next year, especially with Cybercab production, the potential launch of Unsupervised Full Self-Driving, and the Roadster unveiling, all planned for Q1.
Investor's Corner
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
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