Investor's Corner
Tesla Chair of the Board letter urges stockholders to approve Texas reincorporation
Tesla has been putting in a lot of effort into encouraging TSLA shareholders to vote for Proposals Three and Four at the 2024 Annual Stockholders’ Meeting. While previous letters that have been sent about the matter have been quite focused on Elon Musk’s compensation plan, a recent letter from Tesla Board Chair Robyn Denholm has focused on Tesla’s proposed reincorporation to Texas.
As could be seen in Denholm’s letter, Texas is already the business home for Tesla, so it only makes sense to make the Lone Star state into the company’s legal home as well. Texas is already home to Tesla’s headquarters and Giga Texas is the electric vehicle maker’s flagship production facility. As per the Board Chair, thousands of Tesla employees and some executives have also moved to Texas.
More importantly, Denholm noted that Delaware is simply no longer the right jurisdiction for Tesla, and that the company has been studying a move out of Delaware for some time. Denholm provided some benefits that Tesla could see if it was reincorporated at the Lone Star state. “We need to be incorporated in a state that we believe will protect stockholder rights while, at the same time, support the kind of innovation that has driven the strong stockholder returns you have enjoyed over the past several years. That state is Texas,” Denholm wrote.
Following is Denholm’s recent letter to TSLA shareholders.
Dear Fellow Stockholder,
Tesla has been one of the most successful enterprises of our time. In just the past six years, we created more than $735 billion’ in value for you while advancing our mission of accelerating the world’s transition to sustainable energy and driving an unmatched pace of innovation in artificial intelligence. Our next growth vector is equally as ambitious.
But the present and future value Tesla is poised to deliver for all of you is at risk. This year’s Annual Stockholders’ Meeting is rapidly approaching, and we need your vote on two important proposals:
Vote FOR Proposal Three – Redomesticating Tesla in the State of Texas
Vote FOR Proposal Four – Ratification of the 2018 CEO Performance Award
Both of these proposals are critical to our future. But today, I want to talk about Texas.
Texas is already our business home. We need to make it our legal home, too.
Redomesticating in Texas is the logical evolution for Tesla. We have moved our corporate headquarters to Texas in 2021 and in 2022, we completed our Gigafactory Texas – Tesla’s principal manufacturing facility, the production hub for the Model Y and the home of the Cybertruck and our future vehicles. Thousands of our employees as well as our executives have moved there.
Texas also has a legal regime that will enable us to advance our world-changing mission and, in turn, continue to create additional value for you.
There is value in business disputes being heard where Tesla is headquartered – the community is directly impacted by court decisions affecting our Company.
Over the last several years it has become clear that Delaware is no longer the right jurisdiction for us. In fact, we have been studying a move out of Delaware for some time. Redomesticating in Texas builds on our relationships with the state and local communities, including government actors, employees and other stakeholders, which are critical to Tesla, and reinforces our commitment to the state.
We need to be incorporated in a state that we believe will protect stockholder rights while, at the same time, support the kind of innovation that has driven the strong stockholder returns you have enjoyed over the past several years. That state is Texas.
Everything is bigger in Texas, and being in Texas enables us to dream bigger for the future, and for all of you.
Sincerely,
Robyn M. Denholm
Chair of the Board
The decision of Tesla shareholders on Proposals Three and Four will be announced at the 2024 Annual Stockholders’ Meeting, which is scheduled for June 13, 2024. The meeting will be held at Giga Texas at 3:30 PM CT. Similar to previous Tesla events, the 2024 Annual Stockholders’ Meeting will be livestreamed.
Tesla’s recent communication to TSLA shareholders can be viewed below.
Tesla Letter to Stockholders May 28 2024 by Simon Alvarez on Scribd
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Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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