Investor's Corner
BMW CEO reportedly risks replacement amid poor sales, weak EV strategy, and the rise of Tesla’s Model 3
BMW CEO Harald Krüger has always preferred to work in the background. Content to leave the stage for others, Krüger has mostly led BMW in an almost understated manner. Yet, in a recent meeting with German Chancellor Angela Merkel and fellow executives from rivals Volkswagen and Daimler, the CEO proved assertive, announcing that BMW will be looking to sell around 300,000 electric and electrified vehicles annually by 2021.
Krüger’s assertive stance on EVs is likely due to pressures that BMW is feeling in the electric vehicle market, which has, in more ways than one, started affecting the security of the CEO’s post. The 53-year-old BMW executive’s contract expires in May 2020, and theoretically, the company’s Supervisory Board could extend it. Unfortunately, reports are now emerging that Krüger’s contract as BMW’s chief executive might not be extended anymore, according to information gathered by German news agency Handelsblatt.
Amidst BMW’s current challenges, the publication alleges that the automaker no longer considers an extension of Krüger’s CEO contract as the most plausible scenario in the near future. Talks of tensions in BMW’s leadership have emerged, and an insider has even noted that there is “high pressure in the boiler.” If Krüger is not able to keep his CEO post, two board members are reportedly set to take over his seat: the ambitious Head of Development Klaus Fröhlich and the more tempered Oliver Zipse, who took over BMW’s production department from Krüger back in 2015.
BMW is currently facing a number of challenges. The company has initiated a group-wide “hiring freeze,” and the CEO’s critics were quick to point out that despite BMW’s “biggest model offensive in the company’s history,” sales have stagnated. Over the past nine months, the German automaker surprised with two profit warnings, and margins for its vehicles are under pressure. Krüger, for his part, remained cautiously optimistic, stating that “In the second half of the year, we expect a tailwind” amid the upcoming release of large vehicles like the BMW X7 SUV.
Hiring freezes and poor sales aside, one thing that has notably irked the German automaker’s shareholders is its poor electric vehicle strategy. In 2013, Krüger’s predecessor, Norbert Reithofer, launched the BMW i3, a curiously futuristic electric car that was compared to the Tesla Model S. BMW has not released a pure battery-electric vehicle since then. Jaguar has started its push with the I-PACE, Audi has released the e-tron, and Mercedes-Benz has already unveiled the EQC. BMW’s iX3, on the other hand, won’t be ready for at least another year. Speaking to the publication, a competitor noted that “BMW was ahead, now they are suspended.”
The emergence of Tesla as a player in the premium sedan market has also become a painful pill to swallow for BMW. With its international rollout, the Tesla Model 3 continued to hack away at the sales of BMW’s iconic 3-Series sedan. Tests from publications such as Top Gear, which have been traditionally pro-petrol in the past, have also recognized the Silicon Valley-made Model 3 as superior in more ways than one to a BMW. Tesla’s rise has not escaped the attention of BMW’s investors, who appear to be getting quite impatient with the German automaker’s delayed, if not half-hearted EV strategy.
These sentiments were expressed during BMW’s annual shareholder meeting in May. Addressing the company, shareholder protector Daniela Bergdolt did not mince words. “I now expect an electric offensive that sweeps Tesla off the table,” she said, and the company did not really have a strong response. There’s the i4 and the iNext, but both vehicles don’t currently have a concrete release date. The impressive BMW Vision M Next, which was recently revealed, is also an eye-catching concept vehicle, but it still remains to be seen if or when the car will enter production.
Investor's Corner
Tesla enters new stability phase, firm upgrades and adjusts outlook
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
Tesla is entering a new phase of stability in terms of vehicle deliveries, one firm wrote in a new note during the final week of October, backing its position with an upgrade and price target increase on the stock.
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
While most firms are interested in highlighting Tesla’s future growth, which will be catalyzed mostly by the advent of self-driving vehicles, autonomy, and the company’s all-in mentality on AI and robotics, Pozdnyakov is solely focusing on vehicle deliveries.
The analyst wrote in a note to investors that he believes Tesla’s updated vehicle lineup, which includes its new affordable “Standard” trims of the Model 3 and Model Y, is going to stabilize the company’s delivery volumes and return the company to annual growth.
Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings
Tesla launched the new affordable Model 3 and Model Y “Standard” trims on October 7, which introduced two stripped-down, less premium versions of the all-electric sedan and crossover.
They are both priced at under $40,000, with the Model 3 at $37,990 and the Model Y at $39,990, and while these prices may not necessarily be what consumers were expecting, they are well under what Kelley Blue Book said was the average new car transaction price for September, which swelled above $50,000.
Despite the rollout of these two new models, it is interesting to hear that a Wall Street firm would think that Tesla is going to return to more stable delivery figures and potentially enter a new growth phase.
Many Wall Street firms have been more focused on AI, Robotics, and Tesla’s self-driving project, which are the more prevalent things that will drive investor growth over the next few years.
Wedbush’s Dan Ives, for example, tends to focus on the company’s prowess in AI and self-driving. However, he did touch on vehicle deliveries in the coming years in a recent note.
Ives said in a note on October 2:
“While EV demand is expected to fall with the EV tax credit expiration, this was a great bounce-back quarter for TSLA to lay the groundwork for deliveries moving forward, but there is still work to do to gain further ground from a delivery perspective.”
Tesla has some things to figure out before it can truly consider guaranteed stability from a delivery standpoint. Initially, the next two quarters will be a crucial way to determine demand without the $7,500 EV tax credit. It will also begin to figure out if its new affordable models are attractive enough at their current price point to win over consumers.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
Elon Musk
Tesla analyst: ‘near zero chance’ Elon Musk’s $1T comp package is rejected
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
A Tesla analyst says there is “zero chance” that CEO Elon Musk’s new compensation package is rejected, a testament to the loyalty and belief many shareholders and investors have in the frontman.
Tesla investors will vote on November 6 at the annual Shareholder Meeting to approve a new compensation package for Musk, revealed by the company’s Board of Directors earlier this month.
The package, if approved, would give Musk the opportunity to earn $1 trillion in stock, an ownership concentration of over 27 percent (a major request of Musk’s), and a solidified future at the company.
The Tesla Community on X, the social media platform Musk bought in 2023, is overwhelmingly in favor of the pay package, though a handful of skeptics remain.
Nevertheless, the big pulls of this vote are held by proxy firms and other large-scale investors. Two of them, Institutional Shareholder Services (ISS) and Glass Lewis, said they would be voting against Musk’s proposed compensation plan.
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
Today, the State Board of Administration of Florida (SBA) said it would vote in favor of Musk’s newly-proposed pay day, making it the first large-scale shareholder to announce it would support the CEO’s pay.
One analyst said that Musk’s payday is inevitable. Gary Black of the Future Fund said today there is a “near-zero chance” that shareholders will allow Musk’s pay package to be rejected:
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
He added an alternative perspective from Wedbush’s Dan Ives, who said that he had a better chance of starting for the New York Yankees than the comp package not being approved.
There is a near zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting. As Wedbush analyst Dan Ives (@divestech) colorfully put it in a Yahoo Finance interview on October 23rd: “I have a better chance of starting for…
— Gary Black (@garyblack00) October 27, 2025
Black’s the Future Fund sold its Tesla holdings earlier this year. He explained that the firm believed the company’s valuation was too disconnected from fundamentals, citing the P/E ratio of 188x and declining earnings estimates.
The firm maintained its $310 price target, and shares were trading at $356.90 that day.
Shares closed at $452.42 today.
The latest predictions from betting platform Kalshi have shown Musk’s comp package has a 94 percent chance of being approved:
— Kalshi (@Kalshi) October 20, 2025
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