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.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
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