Tesla stock

In the ongoing tug-of-war between Tesla bulls and bears, one of the most controversial subjects these days is the gross margin that Model 3 can generate at a 5,000 cars per week production rate as well as the rate when production lines have fully matured. Bears had previously focused on whether Tesla could successfully ramp up Model 3 production quickly enough so as to hit the 5,000 per week production number before Tesla’s cash position becomes compromised, but with the company now consistently turning out thousands of Model 3s per week and evidence of additional gains, the emphasis has shifted to the profitability of those cars produced, and this is where the concept of gross margin becomes key.