Investor's Corner
Tesla’s experience in electric cars emphasized anew after Mercedes EQC reveal
Earlier today, Tesla stock was given a Sell rating by Goldman Sachs, citing the arrival of competitors from established automakers. Some of these competitors are dubbed as “Tesla Killers,” such as the Jaguar I-PACE and the Mercedes-Benz EQC. The financial firm’s renewed Sell rating on Tesla appears to have affected the sentiment of some investors, resulting in TSLA stock ending the day down 4.21% at $288.95 per share.
Earlier today, the electric car industry also welcomed its latest vehicle from legacy automaker Mercedes-Benz. At an event in Stockholm, Sweden, Daimler AG Chief Executive Officer Dieter Zetsche unveiled the Mercedes-Benz EQC, an all-electric crossover SUV that symbolizes the company’s commitment to the upcoming electrification of the transport industry.
“There is no alternative to betting on electric cars, and we’re going all in. It is starting right now,” Zetsche said.
Mercedes-Benz tried hard with the EQC, with Zetsche stating that the vehicle will be profitable, and that it would “offer the best package” compared to rivals. The EQC also looks very much like a conventional Merc SUV, with its almost understated lines, its high ground clearance, and its tough stance. The EQC’s basic specs are quite decent, with two electric motors that produce 402 hp and 564 lb-ft of torque. The SUV can accelerate from 0-60 mph in 4.9 seconds and hit a top speed of around 112 mph. That being said, the Mercedes-Benz EQC’s range and production date ultimately prove that it won’t be so easy for legacy automakers to gain EV expertise that is comparable to Tesla’s.
The Mercedes-Benz EQC is equipped with an 80 kWh battery pack, which puts its size between the base Model X’s 75 kWh battery pack and the Jaguar I-PACE’s 90 kWh battery. Despite its generous battery size, the EQC’s estimated range is very conservative at around 200 miles per charge. Charging the vehicle from 10% to 80% is also estimated to take around 40 minutes. The EQC’s apparent lack of range has not gone unnoticed. Alex Roy, a veteran of the auto industry, for one, noted that the EQC’s range was a big “miss” for the established German automaker.
In a way, this could be attributed to Mercedes-Benz’s lack of experience in designing and building all-electric cars. And it’s not just Mercedes-Benz, either. Jaguar’s I-PACE is listed with a 240-mile range, but informal, real-world tests online have noted that the vehicle’s battery consumption is quite high. The same could be true for the EQC. It might have a big enough battery, but it could prove to be the electric equivalent of a gas guzzler.
This is something that Tesla has refined over the years. Elon Musk has opted to develop Tesla’s battery packs and even its software in-house, allowing the company to create vehicles that just work. In terms of range, Tesla’s cars usually come very close to their rated range, in some instances even exceeding it. Even the Model X 75D — one of Tesla’s largest, heaviest offerings — could go as far as 237 miles with a 75 kWh battery. Tesla’s progress in developing and building electric cars ultimately cannot be discounted, as Volkswagen AG, a prominent German automaker, was one of the investors willing to help fund Tesla’s attempted privatization.
Another notable detail from the Mercedes-Benz EQC’s unveiling that validated Tesla’s experience in building electric cars is the German-made SUV’s production timeline. Mercedes expects to start manufacturing the EQC sometime next year, with deliveries beginning in 2020. Compared to Tesla’s hyper-aggressive timetables, Mercedes-Benz’s timeline is very conservative, especially considering that the automaker is looking to build the EQC in some of its existing facilities.
A Tesla Model 3 being assembled.
There is very little doubt that Tesla is the company that ultimately made electric cars desirable, proving to consumers that battery-powered vehicles are actually realistic alternatives to fossil fuel-powered cars. Since starting the production of the Tesla Roadster, the company has gained a lot of experience, a lot of it coming from trial and error. Over the years, Tesla has refined its battery technology, to the point where the company is now attempting to hit a battery pack cost of $100 per kWh. Its 2170 cells that power the Model 3 are also proving to be impressive, with Detroit veteran Sandy Munro praising it as some of the finest batteries he has ever analyzed.
A central part of the Tesla Killer thesis is that competitors from established automakers can easily catch up and overtake the California-based company with vehicles that are far superior in quality and performance. If the range and estimated delivery date of the Mercedes-Benz EQC are any indication, it appears that the arrival of these competitors might be just a little bit too late. After all, by 2020, Tesla is planning to start the production of the next-generation Tesla Roadster, a supercar to end all supercars. The Tesla Model Y, a CUV expected to be even more popular than the Model 3, would likely be in production by then as well.
Watch the Mercedes-Benz EQC’s unveiling in the video below.
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.
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