The Rock Trading Group
CMT, Technical/Situational Analysis, Options Trading
Tesla could benefit from a potential merger with SpaceX. Per reports, Tesla executives are preparing to separate its China business, with advisers discussing a spinoff, sale or factory closure, as a merger would need to address conflicts arising from SpaceX's status as a defense contractor. x.com x.com
The Transcript
Weekly Earnings-Call Quotes Newsletter
"On the automotive business, we exited the quarter with our highest backlog in 4 years, with deliveries constrained primarily by production. x.com
AlvaSupportsTesla CFO Vaibhav Taneja confirms that the four-year-high vehicle backlog reflects strong demand and says deliveries were constrained primarily by production, supporting the delivery beat while identifying production capacity as the limiting factor.Bloomberg Intelligence
Bloomberg Financial Research Service
No, the low-cost version of the car, [Elon Musk] basically turned it into the Cybercat. So instead of a cheap, I think there were talking about calling it a Model 2, [Elon Musk] realized that they couldn't make it profitably, and they couldn't compete with Chinese automakers over there with their cost base. podtrac.com
AlvaChallengesWelch argues Tesla could not profitably build its planned low-cost car or match Chinese automakers' costs, weakening the case for durable, profitable vehicle growth.
Dow Jones
Real-Time Financial News Wire
Lower average sale prices in the face of fierce competition from China weighed on the vehicle business, Mould says. tradingview.com
AlvaChallengesMould attributes weakness in Tesla's vehicle business to lower selling prices amid Chinese competition, weakening the economic case for the delivery rebound.Dow Jones
Real-Time Financial News Wire
New-car registrations for Tesla models, a reflection of sales, jumped 72.5% on year in September to 68,776 units across the European Union, the U.K., Iceland, Liechtenstein, Norway and Switzerland, according to the European Automobile Manufacturers' Association, an industry body also known as ACEA. tradingview.com
AlvaSupportsThe reported 72.5% year-over-year rise in European registrations supports the view that Tesla is gaining sales momentum.Dow Jones
Real-Time Financial News Wire
Tesla says battery availability "continued to be a limiting factor in increasing auto volumes in the quarter." ... In the third quarter, total production was up 4% year-over-year, thanks to an increase in Model 3/Y production, while auto sales fell 3% to $20.56 billion. tradingview.com
AlvaChallengesLimited battery availability pressured auto volumes, tempering confidence in Tesla's production recovery despite 4% year-over-year total production growth.Dow Jones
Real-Time Financial News Wire
Tesla flagged that limited battery availability is holding up production. The company finished the third quarter with its largest passenger-vehicle backlog in four years, it said in its earnings report. ... The company said it is making progress toward building a bigger supply to boost its battery production capabilities, with major projects in Berlin, Texas and Nevada. tradingview.com
AlvaMixedBattery constraints and the four-year-high backlog point to a production bottleneck, tempering the strong delivery result; Tesla's reported progress on expanding battery supply could ease that constraint.
First Squawk
Financial Audio News Service
TESLA Q3 REVENUE $28,046 MLN, ABOVE IBES ESTIMATE OF $27,883 MLN, WITH ADJUSTED EPS $0.48, ABOVE ESTIMATE OF $0.43, GROSS MARGIN 19.6%, OPERATING MARGIN 2.6% AND FREE CASH FLOW $1,531 MLN VERSUS AN IBES ESTIMATE OF NEGATIVE $4,921 MLN x.com
AlvaSupportsRevenue and adjusted EPS beat estimates, and free cash flow was positive versus an expected loss, reinforcing the stronger-than-expected Q3 picture; gross and operating margins remain relevant to profitability.
Reuters
Global News Agency
Tesla delivered 486,532 vehicles in the third quarter, beating Wall Street expectations of about 461,100 vehicles. Deliveries were down about 2% from a year earlier.Deliveries outpaced production of 464,391 vehicles by more than 22,000 for a second straight quarter, resulting in an inventory drawdown. tradingview.com
AlvaMixedThe delivery beat supports the thesis's headline figure, while the 2% year-over-year decline tempers the rebound claim; deliveries exceeding production also reduced inventory.
Walter Bloomberg
Financial News Headlines Aggregator, Not Affiliated with Bloomberg
Kalshi now prices a 67% chance of a merger before February 2027, up from roughly 30% earlier this month. x.com
AlvaSupportsThe higher market-implied probability strengthens the reported SpaceX merger as a potential bullish catalyst, while remaining speculation rather than confirmation.
Max Chafkin
Bloomberg Businessweek columnist and author of The Contrarian
Tesla has a very, very, very successful automotive business. They sell lots of electric cars. We've seen their sales. Their sales kind of took a dive in 2025, but they've stabilized to some extent. Still not great. Still not growing, I think, in the way that some Tesla investors would have liked, but certainly somewhat improved over a year ago. ... So he is operating this company in a way that does not suggest he's prioritizing the car business. podtrac.com
AlvaChallengesStabilizing but still weak sales growth and Musk's apparent lack of focus on cars temper confidence that vehicle demand will sustain the bullish case.
TBPN
Technology's Daily Show
Elon Musk's biographer @WalterIsaacson doesn't think enough people are focusing on the Roadster as basically a joint Tesla and SpaceX product and a physical manifestation of their potential future merger. x.com
AlvaSupportsIsaacson's reported view supports the potential-merger catalyst in the thesis, framing the Roadster as a joint product and a sign of a possible future merger.
Walter Isaacson
Bestselling biographer, Tulane history professor and Perella Weinberg advisory partner
But one thing you gotta focus on, I'm not sure people focus on this enough, is that this is almost a joint product ... Of Tesla and SpaceX. ... I mean, everything about it, including the way the thrusters and the rockets work. But this notion that, you know, you can have propulsion done this way for a car, I think it shows why eventually, and I would guess, Tesla and SpaceX are gonna merge. media.transistor.fm
AlvaSupportsIsaacson sees the Roadster as nearly a joint Tesla-SpaceX product and expects an eventual merger, adding a reason for the thesis's possible merger catalyst.
David Welch
Bloomberg Detroit bureau chief covering the auto industry
I think you might see some better numbers because they did surprise on the upside with their third quarter vehicle sales. And analysts are basically forecasting better. Finally, some growth in Tesla's total vehicle sales after a couple years of decline. podtrac.com
AlvaSupportsAnalysts’ forecasts point to a return to vehicle-sales growth after years of decline, reinforcing the thesis’s bullish case; that growth is expected, not yet confirmed.David Welch
Bloomberg Detroit bureau chief covering the auto industry
[Scarlet Fu: "So no indication that we're going to get any kind of Tesla-SpaceX merger that you kind of referenced at the top of our conversation."] I doubt he would announce it there. There's a lot of speculation in analyst reports that we're going to see it sometime soon and that investors are widely expecting it. ... But could it use an injection like being folded into SpaceX? Perhaps yes. podtrac.com
AlvaSupportsWelch's account of analyst speculation keeps a Tesla-SpaceX merger in play, though he doubts Musk would announce one at the upcoming earnings event.