Investor's Corner
Tesla Model 3 headlights gain the IIHS’ elusive ‘Good’ rating after design update
Earlier this year, the Insurance Institute for Highway Safety (IIHS), a nonprofit organization dedicated to reducing the number of accidents and injuries on the road, awarded the Tesla Model 3’s headlights with an “Acceptable” rating. While the IIHS’ tests gave a “Superior” rating for the vehicle’s front crash avoidance features then, the safety organization only listed the vehicle’s headlights as “Acceptable,” due to glaring issues from the Model 3’s low beams.
In a recent Twitter announcement, though, the IIHS noted that the Tesla Model 3 now earns a “Good” rating for its standard LED reflector headlights. The IIHS stated that the vehicle’s improved, updated score reflects the headlights of Model 3 that were produced after June 2018, a time when Tesla was starting to hit its stride with the production of the electric sedan.
The IIHS’ updated results could be seen in the Model 3’s page on the nonprofit’s website. So far, though, the IIHS has not released the Model 3’s official full safety ratings, which include metrics such as “Roof Strength” and “LATCH ease of use.”
That said, the Model 3’s “Good” rating for its headlights says a lot about Tesla’s focus on designing an incredibly safe electric car. The IIHS, after all, utilizes one of the strictest metrics for testing headlights. The headlights of the Tesla Model S, for one, were given a “Poor” rating by the IIHS. The Chevy Bolt EV’s headlights, which are incredibly bright, were also rated as “Poor.”
The IIHS evaluates headlights based on the lamps’ reach as the vehicle travels on straight and curved lines. Low beams are measured on five approaches — straightaways, left and right curves on an 800-foot radius, and sharp left and right curves on a 500-foot radius. The IIHS weighs low beams more heavily than high beams since they are used more often when driving. During the Model 3’s initial tests earlier this year, the vehicle’s low beams exhibited a 15.2% glare during straightways, preventing the Model 3 from earning the IIHS’ “Good” rating. As noted by the IIHS, this particular issue was addressed in Model 3 produced after Q2 2018.
The updated score of the Model 3’s headlights highlights Tesla’s unique tendency to update its vehicles as soon as improvements are available. This was pointed out by Elon Musk on Twitter, when he stated that when it comes to Tesla’s electric cars, there is “no such thing as a full refresh” since all vehicles are “partially upgraded every month as soon as a new subsystem is ready for production.” This practice was also mentioned by Tesla President of Automotive Jerome Guillen in an interview with CNBC, when he noted that the company’s technology is always in a process of evolution.
The 2018 Tesla Model 3 now earns a good rating for its standard LED reflector headlights for models built after June 2018. Previous models earn an acceptable rating. https://t.co/EUWXFLBnkm pic.twitter.com/TOctSTGaAl
— IIHS (@IIHS_autosafety) December 26, 2018
In a statement to CNET, IIHS senior vice president for communications Russ Rader explained the organization’s focus on headlights as a metric for vehicle safety. Rader also noted that headlights must be seen not just as a decorative component of a vehicle. Instead, they should be perceived as safety equipment.
“When one vehicle’s low beams only illuminate the right side of a straightaway for 148 feet, and another vehicle’s low beams allow a driver to see more than twice as far, there’s a problem. IIHS has incorporated headlight performance into our Top Safety Pick awards. We’re already seeing manufacturers make improvements, especially tightening up aim at the factory. Headlights shouldn’t just be about what looks cool. They’re important safety equipment. When they perform well, they can help drivers spot trouble sooner and avoid a crash.”
Apart from the IIHS, the Model 3 is also gaining accolades from other safety organizations. The National Highway Traffic Safety Administration (NHTSA), for one, has given the Model 3 a flawless 5-Star Safety Rating. The organization tested the Model 3 on frontal crash, side crash, and rollover safety; and in all categories and subcategories, the electric car displayed a level of industry-leading driver and passenger safety. As highlighted by Tesla in a following blog post, the scores of the Model 3 from the NHTSA’s tests place the electric car as the vehicle with the “lowest probability of injury” among all cars tested by the NHTSA to date.
Elon Musk
Norway’s $2 trillion sovereign wealth fund votes against Elon Musk’s 2025 performance award
The fund is managed by Norges Bank Investment Management (NBIM), and it holds a 1.14% stake in Tesla valued at about $11.6 billion.
Norway’s $2 trillion sovereign wealth fund has voted against Elon Musk’s 2025 performance award, which will be ultimately decided at Tesla’s upcoming annual shareholder meeting.
The fund is managed by Norges Bank Investment Management (NBIM), and it holds a 1.14% stake in Tesla valued at about $11.6 billion.
NBIM’s opposition
NBIM confirmed it had already cast its vote against Musk’s pay package, citing concerns over its total size, dilution, and lack of mitigation of key person risk, as noted in a CNBC report. The fund acknowledged Musk’s leadership of the EV maker, and it stated that it will continue to seek dialogue with Tesla about its concerns.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk- consistent with our views on executive compensation. We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM noted.
The upcoming Tesla annual shareholder meeting will decide whether Musk should receive his proposed 2025 performance award, which would grant him large stock options over the next decade if Tesla hits several ambitious milestones, such as a market cap of $8.5 trillion. The 2025 performance award will also increase Musk’s stake in Tesla to 25%.
Elon Musk and NBIM
Elon Musk’s proposed 2025 CEO performance award has proven polarizing, with large investors split on whether the executive should be given a pay package that, if fully completed, would make him a trillionaire.
Institutional Shareholder Services and Glass Lewis have recommended that shareholders vote against the deal, and initiatives such as the “Take Back Tesla” campaign have rallied investors to oppose the proposed performance award. On the other hand, other large investors such as ARK Invest and the State Board of Administration of Florida (SBA) have urged shareholders to approve the compensation plan.
Interestingly enough, this is not the first time that Musk and NBIM have found themselves on opposing sides. Last year, NBIM voted against reinstating Musk’s 2018 performance award, which had already been fully accomplished but was rescinded by a Delaware judge.
Later reports shared text messages between Musk and NBIM Chief Executive Nicolai Tangen, who was inviting the CEO to a dinner in Oslo. Musk declined the invitation, writing, “When I ask you for a favor, which I very rarely do, and you decline, then you should not ask me for one until you’ve done something to make amends. Friends are as friends do.”
Investor's Corner
Michael Dell points out practical advantage of Elon Musk’s proposed pay package
As pointed out by the Dell Technologies CEO, Musk will only be rewarded if he delivers extraordinary value to shareholders
Michael Dell has weighed in on Elon Musk’s controversial 2025 CEO Performance Award, offering a grounded perspective amidst the noise surrounding the pay package today.
As pointed out by the Dell Technologies CEO, Musk will only be rewarded if he delivers extraordinary value to shareholders. Musk would quite literally receive no compensation if he fails to achieve his targets.
Dell emphasizes results over rhetoric
Dell shared his thoughts about Musk’s 2025 CEO Performance Award in a post on X.“Vote FOR Elon Musk. The award is only achieved IF he hits exceptionally ambitious market-cap and operational milestones—if he falls short, he gets nothing,” Dell wrote in his post.
“If he succeeds, shareholders will win big through unprecedented value creation, and he will earn added voting rights to continue driving Tesla’s long-term vision.”
Musk replied with a short “Thanks Michael,” acknowledging Dell’s support. Dell’s framing cuts through the debate surrounding Musk’s compensation, as he simply focused on the incentive structure’s risk-reward balance.
Musk’s ambitious pay package
Elon Musk’s 2025 CEO Performance Award requires Tesla’s market capitalization to rise from roughly $1.1 trillion today to $8.5 trillion within a decade. This would make Tesla more valuable than any company in history.
Apart from this, Tesla’s operating profit must also grow from $17 billion to $400 billion annually. Musk must also lead the company to several product-related milestones, such as 20 million cumulative vehicle deliveries, 10 million Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million operating Robotaxis.
So far, proxy advisors Glass Lewis and ISS have urged shareholders to vote against the plan. Some prominent investors, including ARK Invest CEO Cathie Wood, however, have voiced strong support for the plan. Wood called Musk “the most productive human being on earth,” arguing that his vision and ability to attract talent are central to Tesla’s success.
Investor's Corner
Elon Musk’s 2025 pay package gets support from Tesla’s biggest bull
ARK Invest founder Cathie Wood has previously stated that she is quite confident that the vote on Elon Musk’s 2025 Performance Award would pass.
Cathie Wood, CEO of ARK Invest and one of Tesla’s most ardent bulls, reiterated her support for Elon Musk’s 2025 CEO Performance Award.
Wood highlighted that Musk’s leadership attracts incredible talent, and it has allowed the companies he leads such as Tesla to become disruptors in their respective fields.
ARK Invest supports Musk’s leadership
Elon Musk’s 2025 CEO Performance Award has received a mixed reception. Proxy firms such as Glass Lewis and Institutional Shareholder Services (ISS) have stated that they would be voting against Musk’s pay package. Other entities, such as the State Board of Administration of Florida (SBA), have stated that they would be voting in favor of Tesla’s proposals.
ARK Invest founder Cathie Wood, for her part, has previously stated that she is quite confident that the vote on Elon Musk’s 2025 Performance Award would pass. She also stated that a favorable result to the vote for Musk’s 2025 pay plan would be beneficial for Tesla.
“Elon Musk is the most productive human being on earth. And a human being who attracts incredible talent, people who want to solve the world’s hardest problems. This is a win-win for all of us if Elon succeeds this time,” Wood stated. Musk appreciated Wood’s comments, stating, “Thanks Cathie!” In a post on X.
ARK Invest has been one of Tesla’s most loyal bulls
Tesla is ARK Invest’s single largest holding, with the firm holding an estimated $1 billion worth of TSLA, as noted in an Insider report. Wood previously said she expects the approval of Musk’s pay package to trigger “super-exponential growth” for the automaker, as new products like the Cybercab and Optimus expand Tesla’s offerings.
“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI, and it’s not stopping with Robotaxis. There’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” Wood stated during an appearance at Steven Bartlett’s podcast The Diary Of A CEO.
Norway’s $2 trillion sovereign wealth fund votes against Elon Musk’s 2025 performance award
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