Tesla shares climbed 2.24% on Friday, buoyed by CEO Elon Musk's clarification of a major semiconductor venture, improving sales of China-made vehicles, and upbeat analyst commentary ahead of the company's third-quarter earnings report scheduled for October 21.
Musk clarifies Tesla and SpaceX's role in Terafab
Musk detailed that Tesla and SpaceX will own and operate Terafab, a proposed chip manufacturing facility in Texas. The project is designed to expand semiconductor capacity for artificial intelligence applications, addressing what Musk sees as a critical bottleneck for AI growth: chip availability.
Earlier this week, Musk stated on X that Tesla and SpaceX would control the facility, while other companies, including Taiwan Semiconductor Manufacturing, could lease space if interested. The initial phase is projected to cost between $10 billion and $20 billion, shared by the two companies, with the broader project potentially exceeding $100 billion.
The planned facility would span 100 million square feet, incorporating chip manufacturing, advanced packaging, assembly, and testing. That scale would make it 10 times larger than Tesla's electric-vehicle plant in Austin, Texas, and 30 times the size of TSMC's current Arizona chip facility. Intel and TSMC are assisting with the project, and investors may receive further details when Tesla releases its quarterly results.
China sales improve as Tesla awaits earnings
Tesla's China-made vehicle sales rose in September, extending year-over-year gains to 11 consecutive months. Deliveries of Model 3 and Model Y vehicles from the Shanghai factory, including exports, increased 5% from a year earlier to 95,366 units, according to China Passenger Car Association data released Friday. August sales had grown 3.6%.
Third-quarter shipments of Shanghai-built vehicles rose 13.7% year over year, based on Reuters calculations. However, Tesla's global deliveries declined 2.1% from a year earlier, against a record in the third quarter of 2025. The latest global delivery figure still exceeded forecasts, keeping the company on track to return to annual growth after two consecutive years of declines.
Tesla also saw an increase in new-vehicle registrations across several European markets in September, extending its recovery in the region. In China, the company is offering discounts on selected Model Y variants through October, including a 7,000-yuan ($1,044) reduction on final payments, and 5,000-yuan discounts on all Model 3 variants, as competition remains intense.
Analysts focus on AI, autonomy and robotics
Wall Street expects Tesla to report earnings per share of 45 cents on revenue of $28.3 billion for the third quarter, compared with 50 cents per share and $28.1 billion in revenue in the year-earlier period.
Tigress Financial analyst Ivan Feinseth reiterated a Buy rating and a $550 price target ahead of the earnings announcement, expressing optimism about Tesla's artificial intelligence initiatives, including robotaxis, humanoid robots, and its Full Self-Driving driver-assistance product, which costs customers $99 a month.
Dan Ives of Yorkville Ives also sees autonomy and robotics as crucial to Tesla's longer-term prospects. He maintained an Outperform rating and a $500 price target, arguing that the company is evolving into a “physical AI” platform spanning vehicles, autonomous driving, humanoid robots, and energy storage. Ives' assessment emphasizes the potential for software and services to generate revenue alongside the vehicle business.
Turning those ambitions into recurring revenue will be important to the case supporting his price target. For investors, Tesla's upcoming results could provide an opportunity to assess vehicle demand alongside the company's plans for AI infrastructure and other businesses. The outlook will depend not only on sales of its existing vehicles but also on how its longer-term technology initiatives develop.
This article is for informational purposes only and does not constitute financial advice.
