Investor's Corner
Tesla Model S, X softer sales in Europe are NOT due to the Audi e-tron and Jaguar I-PACE
In a note to clients on Wednesday, Bernstein senior technology analyst Toni Sacconaghi concluded that increased competition from vehicles such as the Audi e-tron and the Jaguar I-PACE is responsible for the recent weakness in Tesla’s sales volume in Europe. The analyst further warned that the arrival of other premium electric vehicles like the Mercedes-Benz EQC and the Porsche Taycan could worsen Tesla’s problem.
Explaining further, the Bernstein analyst added that the total market for Europe’s premium electric cars has only grown modestly in 2018 and 2019, and over this time, Tesla’s sales volume has decreased. “Our analysis suggests that the deteriorating sales trajectory of the Model S and X may be primarily due to competition, particularly in Europe, from Jaguar and Audi. In other words, the market isn’t growing much, and Tesla is losing share,” Sacconaghi wrote.
According to TSLA investor @Incentives101, an economist with a background in macro research, Bernstein’s conclusions are inaccurate. In a message to Teslarati, the economist provided a deep dive into the likely causes of the Model S and X’s sales decline in Europe, as well as the reasons why vehicles such as the Jaguar I-PACE and the Audi e-tron are in no way responsible for the reduced market share of Tesla’s flagship sedan and SUV.
Model S and X sales decline
It should be noted that Europe is a region, which means that it is comprised of multiple countries, each with a population of consumers that usually have different preferences in vehicle purchases. Looking at past vehicle sales data, the economist noted that from January-June 2018, Tesla sold 13,426 Model S and X in Europe, while in the first six months of 2019, the figure was 8,037.
“In those months of 2018, Norway and the Netherlands accounted for 52% of sales, while in 2019 it was just 28%. This means that 87% of the drop in sales of Model S and X in Europe is explained by the Norwegian and Dutch market. Furthermore, the Netherlands had Model S and X sales for the first six months of 2018 of 2,833 units and 167 for 2019. This means that the Netherlands by itself explains 50% of the drop in sales for Tesla’s flagship vehicles,” the investor wrote.
The Netherlands and Norway
If one were to look at the sales of the Audi e-tron and the Jaguar I-PACE in the Netherlands for the first half of 2019, one would find that the two vehicles only sold 362 and 111 units, respectively. This means that in the Netherlands, which was behind 50% of the drop in Tesla’s European sales, the e-tron and I-PACE couldn’t have been responsible since their combined sales are only 16% of the Model S and X’s 2018 sales for the same period. With this in mind, some headwinds were met by the Model S and X in the Netherlands, particularly in the form of a change in BIK incentives at the end of 2018, as well as the arrival of the more affordable Model 3, which has reached sales of over 6,000 units in the country.
As explained by the economist, Norway is a key market for Tesla in the European region, and it is responsible for 37% of the drop in Model S and X sales. For the first six months of 2019, Model S and X sales were 2,079 units, while the Audi e-tron sold 2,273 units and the Jaguar I-PACE sold 2,101. Bernstein’s note claimed that the market for premium electric vehicles didn’t increase, and thus, Tesla’s share of the European market just fell. This, according to the investor, is not correct. “If you take the previous Netherlands sales out of the equation — because it becomes incomparable — you’ll see that the market actually increased in Europe,” he wrote.
The actual reasons
The economist noted that there are a couple of factors that likely played a notable part in the decline of the Model S and X’s sales in Norway. First off, Tesla discontinued the 75 kWh (Standard Range) Model S and X, a variant that accounted for more than 80% of the sales in the country. More importantly, Tesla has entered the Norwegian market with the Model 3, a smaller, more affordable vehicle that boasts the best technologies that the electric car maker has to offer. “Norwegians have proven preferences for smaller and cheaper vehicles. Historically, the share of luxury vehicles in Norway is relatively low. It is then by no surprise that the Model 3 is currently selling at levels not seen in any other market, holding 14% of market share for total vehicles,” the economist explained.
In Norway’s case, at least, Tesla appears to have made a notable trade-off. It entered the market with the Model 3, which allowed the company to command 14% of the country’s total vehicle market. This came at a price in the form of a 50% decline in Model S and X sales. Of course, the removal of the Model S and X’s 75 kWh variant, as well as buyer expectations of an impending refresh of the two flagship vehicles, likely played a notable part in Norway’s sales decline as well.
Debunking Bernstein’s thesis
With these factors in mind, it appears that Bernstein’s findings are, for lack of a better term, inaccurate. The economist summed up his thesis as follows. “Two countries explain the drop in sales for the Model S and X almost entirely, and it’s absolutely clear that competition wasn’t the factor. Regulation and consumer preferences are. It is also important to mention that 28% of sales of the Audi e-tron were in Germany as well, a country where the Model S and X have never been strong, even at their peak.
“Consumers in the aggregate always behave rationally. There hasn’t been one example in history where a product(s) that is inferior in every way dominates the market or segment in which they compete. The Audi e-tron, the Jaguar I-PACE, and the Mercedes-Benz EQC are not even in the Model S and X segment specs-wise. Rather, they are closer in specs to the Model 3 and Model Y, both of which undercut them in price. The only reason people mistakenly put them against the Model S and X is their cost,” the investor explained.
Investor's Corner
Tesla bear turns bullish for two reasons as stock continues boost
“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.
A Tesla bear is changing his tune, turning bullish for two reasons as the company’s stock has continued to get a boost over the past month.
Dan Nathan, a notorious skeptic of Tesla shares, said he is changing his tune, at least in the short term, on the company’s stock because of “technicals and sentiment,” believing the company is on track for a strong Q3, but also an investment story that will slowly veer away from its automotive business.
“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.
He also said he believes a rally for the stock could continue as it heads into the end of the quarter, especially as the $7,500 electric vehicle tax credit is coming to an end at the end of the month.
With that being said, he believes the consensus for Q3 deliveries is “probably low,” as he believes Wall Street is likely underestimating what Tesla will bring to the table on October 1 or 2 when it reports numbers for the quarter.
Tesla bear Dan Nathan has flipped his script on Tesla $TSLA shares, citing “technicals and sentiment”
— TESLARATI (@Teslarati) September 12, 2025
Tesla shares are already up over five percent today, with gains exceeding nine percent over the past five trading days, and more than fourteen percent in the past month.
While some analysts are looking at the performance of other Mag 7 stocks, movement on rates from the Federal Reserve, and other broader market factors as reasoning for Tesla’s strong performance, it appears some movement could be related to the company’s recent developments instead.
Over the past week, Tesla has made some strides in its Robotaxi program, including a new license to test the platform in the State of Nevada, which we reported on.
Tesla lands regulatory green light for Robotaxi testing in new state
Additionally, the company is riding the tails of the end of the EV tax credit, as inventory, both new and used, is running extremely low, generally speaking. Many markets do not have any vehicles to purchase as of right now, making delivery by September 30 extremely difficult.
However, there has been some adjustments to the guidelines by the IRS, which can be read here:
Tesla is trading at around $389 at 10:56 a.m. on the East Coast.
Elon Musk
Analyst: Elon Musk’s $1 trillion Tesla pay deal modest against robot market potential
Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment.
Morgan Stanley analyst Adam Jonas, one of Wall Street’s most ardent Tesla (NASDAQ:TSLA) bulls today, has described Elon Musk’s newly proposed $1 trillion performance-based compensation package as a “good deal” for investors.
In a note shared this week, Jonas argued that the package helps align the interests of Musk and Tesla’s minority shareholders, despite its shockingly high headline number.
Future market opportunities
Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment. “Yes, a trillion bucks is a big number, but (it) is rather modest compared to the size of the market opportunity,” Jonas wrote. He added that the humanoid robot market could ultimately surpass the size of today’s global labor market “by a significant multiple.”
“We have entertained scenarios where the humanoid robot market can exceed the size of today’s global labor market… by a significant multiple,” Jonas wrote, as shared on X by Tesla watcher Sawyer Merritt.
The analyst likened the arrival of AI-powered robotics to the transformative effect of electricity, noting that “contemplating future global GDP before AI robots is like contemplating global GDP before electricity.” The Morgan Stanley analyst’s insights align with the idea that as much as 80% of Tesla’s future valuation could be tied to its Optimus humanoid robot program.
Elon Musk’s pay package
Tesla’s board has tied Elon Musk’s proposed compensation package to some of the most ambitious targets in corporate history. The 2025 CEO Performance Award requires the automaker’s valuation to soar from roughly $1.1 trillion today to $8.5 trillion over the next decade, a level that would make Tesla the most valuable company in existence.
The plan also demands a leap in Tesla’s operating profit, from $17 billion in 2024 to $400 billion annually. It also ties the CEO’s compensation to a number of product milestones, including the delivery of 20 million vehicles in total, 10 million active Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million Robotaxis in operation. Tesla’s board emphasized that Musk’s leadership was fundamental to achieving such ambitious goals, with Chair Robyn Denholm noting the award would align the CEO’s incentives with long-term shareholder value.
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.
Tesla Board Chair discusses what is being done to protect CEO Elon Musk
Tesla bear turns bullish for two reasons as stock continues boost
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