Investor's Corner
Is it time for Tesla to partner up with another automaker? I think so.
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Tesla’s stock has continued to slide over the last month, and not for one particular reason. The company has, by far, the best electric vehicles in the world, with the Model S, Model X, and Model 3 leading their segments by miles. Despite this, investors believe that the company is under immense pressure.
Elon Musk hasn’t really gotten the message. He’s plowing ahead with the multi-billion dollar Gigafactory in China, aggressively expanding the Model 3 to new countries, and doubling down on commitments to the super-delayed (but incredible) solar roof. Most other executives would throttle back expansion, allowing the company to widen profits and make investors happy. Musk isn’t like most executives (if you didn’t know that already?). He ignores the idea of ‘corporate strategy,’ and is far more interested in pushing the limit on what is possible. But, with over 40,000 employees and annualized production nearing 400,000 units, the company is entering a period in time in which long-term strategic planning would add tremendous value.
Time to deploy some strategery.
Let’s start with the Model Y. Or I should say, let’s begin with Tesla’s most important vehicle. The SUV market is exploding, and it’s not showing any signs of slowing down. The global SUV market grew from 9.8M units in 2013 to an estimated 23.8M units in 2020. That’s nearly 14% annualized growth over the last seven years. While Tesla has the Model X, it’s priced well above the average consumer’s budget and targets the highest-end of the market.
On the other hand, the Model Y is poised to enter the hottest market in the world: mid-sized crossovers. With world-class technology and an affordable price, it is certainly going to be Tesla’s most popular vehicle. To meet demand, Tesla is going to need to scale production faster and more efficiently than ever before. The only problem? Tesla is already busting out of their massive Fremont facility, and their new facility in China will likely only feed the Asian market (remember the last Chinese-built car you saw on US or European roads? Me neither).
So what does the company do? Build a car in the Gigafactory? Expand Fremont further? Both options aren’t cheap or super fast. Well, let’s jump back to that point I made about long-term corporate strategy. Tesla is at a point where it can’t afford (without raising more cash) to start construction on another US or European factory, the company is already building a Chinese factory to meet existing demand is near cash-strapped. So what should they do? It’s time to partner up with another automaker, specifically Fiat Chrysler.
An Unlikely Marriage.
Fiat Chrysler (FCA) is one of the only automakers holding out on large investments into EV technology, GM is betting big and VW is betting even bigger. With Tesla’s cutting edge motor and battery technology, FCA could leap ahead of their rivals and electrify their fleet. First, the company could start by underpinning a vehicle -platform with Tesla’s powertrain, bringing more scale to Tesla battery operations and forgoing the multi-billion dollar expansion into the technology. Automakers have done these sort of partnerships for years. FCA already shares some diesel engines with GM, Daimler has borrowed VW engines, and most recently Toyota is borrowing a BMW engine for the iconic Supra.
(Photos: Tesla, Ram; Graphic: Christian Prenzler)
So what’s in it for Tesla? Let’s start with the main stage: cash. Musk isn’t interested in slowing down his global expansion, and he shouldn’t be. The company has tremendous demand and is on the cusp of launching several new products: Model Y, Semi, Roadster, and the Solar Roof. A large infusion of cash would allow the company to continue pushing the pedal to the metal. FCA has over $12B in cash, so the company could invest several billion dollars into Tesla. Outside of cash, FCA can lend some much-needed expertise in manufacturing and even some production capacity at one of the company’s two-dozen factories in North America.
I get it, teaming up with FCA doesn’t sound S3XY. But by teaming up with one of the largest automakers, Tesla gains a leg up in manufacturing and an infusion of cash that would allow Musk to continue investing heavily in expansion. What did you think of Tesla partnering with FCA?
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Disclaimer: This column does not necessarily reflect the opinion of Teslarati and its owners. Christian Prenzler does not have a position in Tesla Inc. or any of its competitors and does not have plans to do so in the next 30 days.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Tesla adds a new feature to Navigation in preparation for a new vehicle
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
