Tesla Inc (NASDAQ:TSLA) stock rose 0.34% (As on November 25, 11:06:42 AM UTC-4, Source: Google Finance) after an upgrade by analysts at Citi and an indication from Tesla CEO Elon Musk that South Korea is a top candidate for a new factory the company hopes to build in Asia. The broking firm believe the year-to-date pullback has balanced out the near-term risk/reward, Citi analysts wrote, raising their rating on the stock to neutral. “To become bullish from here, we’d like to gain added confidence on the average sale price/auto gross margin bridge (including tracking near-term datapoints in China and Europe) and FSD progress. In addition to the Citi note, Musk spoke with South Korea’s President Yoon Suk-yeol and expressed optimism that a new Tesla factory will eventually open in the Asian country.
Further, Musk swiftly implemented mass layoffs, fired executives and tweaked important features of the platform. In response, many advertisers paused spending on Twitter campaigns indefinitely, and civil rights activists have called for further boycotts until Musk’s team proves it can manage hate speech and other harmful content on Twitter.
Meanwhile, Musk has said he’s willing to do a buyback at Tesla, pending board approval. Last month, on the company’s third-quarter earnings call, Musk said Tesla is likely to do a “meaningful buyback” next year, potentially between $5 billion and $10 billion.
In the third quarter, the company produced over 365,000 vehicles and delivered over 343,000 vehicles. In Q3, the company began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter. These cars have been ordered and will be delivered to customers upon arrival at their destination. The free cash flow surpassed $3 billion in Q3 and approached $9 billion in the past 12 months.
Moreover, the company is building a Cybertruck line at Giga Texas and making a lot of progress in the robotaxi platform design. And then with respect to batteries, the company is moving as fast as possible to have — to achieve 1,000 gigawatt hours a year of production capacity in the United States vertically integrated. And for cathode Tesla refining, the company is moving a ton of speed to do that. On automotive profitability, the GAAP operating margin was 17.2%, with automotive gross margin at 27.9%. Operating margin is one of the best yet, with improvements in operating leverage. However, Austin and Berlin ramp costs weighed on the margins. Removing regulatory credits and Austin and Berlin, the operating margins would have been the strongest yet and auto gross margin would have been nearly 30%.