Investor's Corner
‘Tesla Killer’ myth debunked by TSLA skeptic: Model 3 faces ‘no credible competition’ until 2020
Tesla stock (NASDAQ:TSLA) seems to be in the process of recovering from Tuesday’s dive over reports of the US Department of Justice’s probe into Elon Musk’s “funding secured” tweet last month, but the company’s most ambitious vehicle — the Model 3 — continues to impress even longtime skeptics. In a recent note, Toni Sacconaghi of Bernstein, who is known to be critical of Tesla in the past, stated that there is simply “no credible competition” for the Model 3 until 2020.
According to Sacconaghi, Bernstein has looked into the upcoming electric cars from several automakers set to arrive in the US within the coming years. In the case of the Model 3, the analyst pointed out that the vehicle would likely be unrivaled until 2020, when Volvo releases its all-electric Polestar 2 sedan.
“But let’s make this clear: there is no actual flood of competition coming. We tallied up every announced electric vehicle arriving in the U.S. between now and 2022, and the results were stark. The Model 3, which will account for 70% of Tesla’s revenues within two years, faces no credible competition whatsoever until 2020, or until Volvo AB launches its all-electric Polestar 2 sedan,” the Bernstein analyst noted.
Sacconaghi’s note also stated that the Tesla Model S and the Tesla Model X would likely be unrivaled until 2020 as well, as the vehicles will only be facing two competitors, the Audi e-tron Quattro and the Jaguar- I-PACE. Ultimately, the analyst noted that instead of hampering Tesla, the release of electric cars from incumbent automakers would most probably “validate and expand the existing market for electric cars.” Sacconaghi further stated that even the Chevy Bolt, which was once perceived as a “Tesla Killer,” does not really rival the Model 3.
“While matching the range and price point of the Model 3, the Bolt arguably remains a lower-end car, without the luxury nameplate, the styling, the performance, or even the electronics offered by Tesla. A side-by-side comparison in real life makes the contrast particularly stark – for one thing, the Bolt is a whole 20 inches shorter than the Model 3. GM has been relatively mum on its specific electric vehicle plans going forward, but we do not expect it to sell clear competitors to the Model 3 anytime within the next 3 years,” the analyst noted.
Toni Sacconaghi is hardly a Tesla enthusiast. Back in July, the analyst released a note expressing his reservations about the Model 3’s long-term profitability. Sacconaghi’s questions during Tesla’s Q1 2018 earnings call incited Elon Musk’s now-infamous outburst as well, with the CEO dubbing his inquiry as “boring” and “boneheaded.”
As other carmakers reveal their own entries into the all-electric market, Tesla’s experience in creating compelling EVs is starting to become evident. Thus, Sacconaghi is not alone in his observations. After Audi’s reveal of the e-tron, longtime Tesla skeptic Patrick Hummel from UBS Group AG — the same group which alleged that the $35,000 base Model 3 would not be profitable — admitted that the performance and specs of rival vehicles from veteran carmakers like Mercedes-Benz and Audi shows that Tesla would likely maintain its lead in the premium electric car market for a bit longer.
Since its steep dive on Tuesday, Tesla stock is starting a seemingly steady trek back up. As of writing, Tesla stock is trading up 1.63% at $289.61 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package
“Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.”
Tesla’s Board of Directors has proposed a new pay package for company CEO Elon Musk that would result in $1 trillion in stock offerings if he is able to meet several lofty performance targets.
Musk, who has not been meaningfully compensated since 2017, completed his last pay package by delivering billions in shareholder value through a variety of performance-based “tranches,” which were met and resulted in the award of billions in stock.
Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation
However, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.”
Now, the company is taking steps to ensure Musk gets paid, as the Board feels that it is crucial to retain its CEO, who has been responsible for much of the company’s success.
This is not a statement to undermine the work of all of Tesla’s terrific employees, but a ship needs to be captained by someone, and Musk has proven he is the right person for the job.
The Board also believes that, based on a statement made by the company in its proxy, various issues will be discussed during the upcoming Shareholder Meeting.
Robyn Denholm and Kathleen Wilson-Thompson recognized Musk’s contributions in a statement, which encouraged shareholders to vote to approve the payout:
“We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensure that Elon was only paid for the performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challegnes Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2108 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.
Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.
In addition to these unprecedented performance milestones, the 2025 CEO Performance Award also includes innovative structural features, born out of the special committee’s considered analysis and extensive shareholder feedback. These features include supercharged retention (at least seven and a half years and up to 10 years to vest in the full award), structural protections to minimize stock price volatility due to administration of this award and, thereafter, incentives for Elon to participate in the Board’s continued development of a framework for long-term CEO Succession. If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”
Musk will have a lot of things to accomplish to receive the 423,743,904 shares, which are divided into 12 tranches.
However, the Board feels he is the right person for the job, and they want him to remain the CEO. This package should ensure that he stays with Tesla, as long as shareholders feel the same way.
Investor's Corner
Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation
Shareholders are expected to vote on the proposal at the annual meeting on November 6.
Tesla’s board has proposed a new compensation package for CEO Elon Musk that could make him the world’s first trillionaire and Tesla the most valuable company in history.
The 2025 CEO Performance Award, outlined in a securities filing on Friday, would be worth up to $900 billion in Tesla stock (NASDAQ:TSLA) if the automaker achieves a series of aggressive performance and valuation goals, according to the New York Times.
Shareholders are expected to vote on the proposal at the annual meeting on November 6.
Tesla is aiming for an insane $8.5 trillion market cap
The package requires Musk to lift Tesla’s market capitalization from about $1.1 trillion today to $8.5 trillion over the next decade. At that level, Tesla would surpass every major public company in existence. Nvidia, currently the world’s most valuable firm, has a market cap of around $4.2 trillion today, as noted in a Motley Fool report. Microsoft and Apple follow at $3.8 and 3.6 trillion each, while Saudi Aramco is valued at around $1.5 trillion.
If Tesla achieves its $8.5 trillion target, it would be worth more than twice Nvidia’s present valuation and nearly eight times its current size. The compensation plan also requires Tesla’s operating profit to grow from $17 billion last year to $400 billion annually.
Elon Musk’s path to a trillionaire status
Apart from leading Tesla to become the world’s biggest company in history, Musk is also required to hit several product targets for the electric vehicle maker. These include the delivery of 20 million Tesla vehicles cumulatively, 10 million active FSD subscriptions, 1 million Tesla bots delivered, and 1 million Robotaxis in operation.
Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson said retaining Musk is “fundamental to Tesla achieving these goals and becoming the most valuable company in history.” If successful, the plan would raise Musk’s Tesla stake from 13% to about 25%, further consolidating his control. It would also result in the CEO earning $900 billion in TSLA stock, allowing him to effectvely become a trillionaire.
The proposal mirrors a 2018 compensation plan that was invalidated in Delaware court earlier this year in the way that it is focused on very aggressive targets and operational milestones. Tesla has since shifted its corporate registration to Texas, where challenges from potential activist shareholders are less of a risk.
Tesla’s SEC filing can be viewed below.
www-sec-gov-Archives-edgar-data-1318605-000110465925087598-tm252289-4_pre14a-htm… by Simon Alvarez
Investor's Corner
Shareholder group urges Nasdaq probe into Elon Musk’s Tesla 2025 CEO Interim Award
The SOC Investment Group represents pension funds tied to more than two million union members, many of whom hold shares in TSLA.
An investment group is urging Nasdaq to investigate Tesla (NASDAQ:TSLA) over its recent $29 billion equity award for CEO Elon Musk.
The SOC Investment Group, which represents pension funds tied to more than two million union members—many of whom hold shares in TSLA—sent a letter to the exchange citing “serious concerns” that the package sidestepped shareholder approval and violated compensation rules.
Concerns over Tesla’s 2025 CEO Interim Award
In its August 19 letter to Nasdaq enforcement chief Erik Wittman, SOC alleged that Tesla’s board improperly granted Musk a “2025 CEO Interim Award” under the company’s 2019 Equity Incentive Plan. That plan, the group noted, explicitly excluded Musk when it was approved by shareholders. SOC argued that the new equity grant effectively expanded the plan to cover Musk, a material change that should have required a shareholder vote under Nasdaq rules.
The $29 billion package was designed to replace Musk’s overturned $56 billion award from 2018, which the Delaware Chancery Court struck down, prompting Tesla to file an appeal to the Delaware Supreme Court. The interim award contains restrictions: Musk must remain in a leadership role until August 2027, and vested shares cannot be sold until 2030, as per a Yahoo Finance report.
Even so, critics such as SOC have argued that the plan does not have of performance targets, calling it a “fog-the-mirror” award. This means that “If you’re around and have enough breath left in you to fog the mirror, you get them,” stated Brian Dunn, the director of the Institute for Comprehension Studies at Cornell University.
SOC’s Tesla concerns beyond Elon Musk
SOC’s concerns extend beyond the mechanics of Musk’s pay. The group has long questioned the independence of Tesla’s board, opposing the reelection of directors such as Kimbal Musk and James Murdoch. It has also urged regulators to review Tesla’s governance practices, including past proposals to shrink the board.
SOC has also joined initiatives calling for Tesla to adopt comprehensive labor rights policies, including noninterference with worker organizing and compliance with global labor standards. The investment group has also been involved in webinars and resolutions highlighting the risks related to Tesla’s approach to unions, as well as labor issues across several countries.
Tesla has not yet publicly responded to SOC’s latest letter, nor to requests for comment.
The SOC’s letter can be viewed below.
Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package
Tesla Robotaxi app download rate demolishes Uber, Waymo all-time highs
Elon Musk’s xAI expands to Seattle with salaries up to $440,000
-
News7 days agoTesla is overhauling its Full Self-Driving subscription for easier access
-
Elon Musk1 week agoElon Musk shares unbelievable Starship Flight 10 landing feat
-
Elon Musk1 week agoElon Musk reveals when SpaceX will perform first-ever Starship catch
-
Elon Musk1 week agoSpaceX Starship Flight 10 was so successful, it’s breaking the anti-Musk narrative
-
Elon Musk2 days agoTesla’s next-gen Optimus prototype with Grok revealed
-
News4 days agoTesla appears to be mulling a Cyber SUV design
-
News1 week agoTesla expands crazy new lease deal for insane savings on used inventory
-
News1 week agoTesla talks Semi ramp, Optimus, Robotaxi rollout, FSD with Wall Street firm