Investor's Corner
‘Tesla will be great long-term,’ Musk says as stock slide continues
Tesla CEO Elon Musk affirmed his confidence in the electric automaker by stating it will be great long-term, despite the stock slide that continues to affect shares.
Tesla shares (NASDAQ: TSLA) have slid considerably in 2022, along with many other automotive and technology stocks. On Tuesday, the decrease continued as the stock reached levels as low as $156.91. At the time of writing, shares were trading at $161.35, down 3.86 percent on the day.
Amongst a broader market decline, Tesla shares have been affected by various external factors this year. Along with Musk’s $44 billion acquisition of Twitter earlier this year, which has Tesla loyalists divided, the company has experienced an increase in competition due to more models and manufacturers entering the sector, and supply chain issues still stemming from the COVID-19 pandemic.
Once worth $1 trillion, Tesla has declined to a valuation that is worth roughly half of that. While the second-most valuable car company, Toyota, is only worth around $197 billion, Tesla still holds the title of the most valuable automaker on Earth.
Musk: Tesla will be great long-term
In a response to WholeMarsBlog, Musk said, “Tesla will be great long-term, but doesn’t control macroeconomic tides.”
Tesla will be great long-term, but doesn’t control macroeconomic tides
— Elon Musk (@elonmusk) December 13, 2022
From a macro perspective, Musk is right. Tesla is up over 600 percent in the past five years. Over the past year, a fifty percent decrease in stock price has been the much more surfaced trend amongst media outlets, but the company has not been the only automaker to experience a rough 2022. Nevertheless, the debate regarding what to do with holdings still rages on.
Tesla Shares: Buy or Sell
Discussions amongst Tesla community members have been polarizing, with many die-hards sticking to their plan to hold shares. Jason DeBolt, who is one of the most notable Teslanaires, retired from his corporate job at the age of 39 thanks to his earnings through Tesla stock. Although the company is still being affected by a broader market decline, DeBolt has considered loading up even more shares.
I’m down $11 million on $TSLA since last year and I’m more bullish on Tesla than ever.
I’m seriously considering selling my house to buy more shares. Like wtf.
Tesla will continue growing revenue 50% annually (as it has since 2014), and profits will grow even faster than that.
— Jason DeBolt ⚡️ (@jasondebolt) December 8, 2022
Others, however, are unwilling to ride the wave and have either decided to sell because of market conditions or because of personal opinions on Musk.
Cancelling my @Tesla Model X order that’s been unfulfilled for over a year now and selling my TSLA stock. They need a cancel option that simply says “Elon Musk”. I won’t give my money to someone that no longer shares the same values I hold important. Likely he never held them. pic.twitter.com/yhxSgJUxZw
— Tom Kulzer (@tkulzer) December 13, 2022
Tesla’s 2022 Performance…and others
Tesla’s 59.68 percent decrease in 2022 defies all of the things the company has accomplished for the year. It opened two new production facilities, expanded global production capacity to well over one million vehicles, and is set to deliver over one million cars in a year for the first time.
Tesla launched the Semi last month, adding to its penetrable markets through commercial projects. The company still overwhelmingly leads the U.S. market share for EVs, so what’s the issue?
Tesla, while it has much more to worry about than just building cars and energy systems, is not the only car company experiencing a downturn this year. Tesla shares are down 59.88 percent this year, but here’s how others are doing in 2022:
- Ford stock: $F – down 37.99% this year
- General Motors stock: $GM – down 36.91% this year
- Rivian stock: $RIVN – down 75.63% this year
- Lucid stock: $LCID – down 80.42% this year
- Polestar stock: $PSNY – down 67.38% this year
Disclosure: Joey Klender is a TSLA Shareholder. I do not hold any other automotive stocks currently.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
BREAKING: Tesla launches public Robotaxi rides in Austin with no Safety Monitor
Tesla Earnings Call: Top 5 questions investors are asking
