Investor's Corner
Tesla’s veteran problem solver Jerome Guillen is Elon Musk’s most strategic appointment yet
Earlier this month, Tesla CEO Elon Musk announced a series of strategic promotions that are aimed at taking the company to reach new heights in the years to come. Among the promotions, Elon Musk’s appointment of veteran accomplisher Jerome Guillen as the company’s new President of Automotive stood out. As the end of the third quarter approaches, it is starting to look like Elon Musk’s promotion of the hands-on executive was the correct strategy.
Jerome Guillen joined Tesla back in 2010 as the director of the Model S program. Prior to his employment at Tesla, Jerome served as the project leader for Daimler’s Freightliner Cascadia program, and eventually as head of the company’s Business Innovation unit. By the time he left for Tesla, Daimler’s Business Innovation unit was profitable and self-funding.
When Jerome joined the electric car maker, Tesla was still a fledgling startup that only produced and delivered a small number of its two-door Roadster to a select group of customers. Being the first vehicle that the company designed from the ground up, a lot was riding on the Model S, particularly as critics of the company were quick to dismiss the electric car as “vaporware.” Guillen was a hands-on executive, and for some early customers of the Model S, he became the go-to person when issues arose.
And issues did arise. When Tesla started delivering the Model S to reservation holders, the company lacked sufficient sales and service centers. Tesla was delivering vehicles directly to people’s homes, and while this worked well for the first few hundred handovers in California, it became a big logistical headache for the company when customers from faraway states started ordering the electric car. Elon Musk, for his part, opted to have Jerome add sales, service, and deliveries to his portfolio. The hands-on executive handled the task well, even developing a reputation for being incredibly responsive to emails and concerns from regular customers.
Early Model S adopter Andrew Wolfe of Los Gatos, California noted in a statement to Bloomberg that he was among the customers who were in constant communication with the executive. Wolfe noted that Jerome was always open to suggestions, such as where Tesla should consider opening additional service centers, as well as the company’s points for improvement in terms of loaner vehicles.
Jerome’s work with the Model S program would ultimately help lay the groundwork for the company’s following vehicles, the Model X SUV and later, the Model 3. The executive briefly took a leave of absence from the company in 2015, but later returned to head the Tesla Semi program. Over the past months, sightings of the Semi across the United States would feature Jerome from time to time, accompanying the long-hauler’s hand-built alpha prototype on its road tests.
While he was heading the Tesla Semi program, Jerome’s out-of-the-box problem-solving skills would prove useful for the company’s overall operations. Back in June, Tesla made headlines when Elon Musk revealed that a new Model 3 assembly line had been set up inside a sprung structure on the grounds of the Fremont factory. The line, dubbed as GA4, was ultimately responsible for giving the company’s production the boost it needed to hit its target of producing 5,000 Model 3 a week before the end of the second quarter. Analysts from Evercore ISI who toured the Fremont factory later noted that GA4 “looked very much like general assembly at other auto plants which we have visited,” and that the “facility looks set to be permanent and in theory should be able to support much faster cycle times.” As Elon Musk would later reveal, GA4 was Jerome Guillen’s brainchild.
The appointment of an executive such as Jerome as the President of Automotive could prove to be Elon Musk’s most strategic move this third quarter. At this point in Tesla’s growth, with hundreds of thousands of reservations in line for the Model 3, the company is pretty much in a situation similar to the one it faced when it was struggling to deliver the Model S to customers across the US. From this perspective, at least, Jerome Guillen appears to be the right man for the job.
It remains to be seen what Jerome’s full responsibilities are now that he is serving as President of Automotive, but amidst Tesla’s end-of-quarter delivery push for the Model 3, the company has begun adopting some out-of-the-box solutions for its current logistical problems. In a recent tweet, for example, Elon Musk noted that Tesla is experiencing a bottleneck in the car carrier trailers transporting vehicles from the Fremont factory to its delivery centers. To help address this issue, Musk stated that Tesla has begun building its own car carriers to help foster quicker deliveries. This is speculation, but such an unorthodox solution carries some very Jerome Guillen-like undertones.
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.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
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