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Tesla stock (TSLA) splits Wall St. as analysts weigh in on Model 3 sustainability

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7 years ago

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Tesla stock (NASDAQ:TSLA) has been characteristically volatile, to the point where CEO Elon Musk boldly declared during the company’s Q1 2018 earnings call that people who fear volatility should not invest in the company. With Tesla recently announcing the date of its Q2 2018 financial results and earnings call, the electric car maker is once more dividing Wall Street down the middle, with bulls and bears both reiterating their stance on the company’s performance.

Mott Capital Management LLC founder Michael Kramer recently noted that Tesla’s investors should prepare themselves for a wild ride, as his firm expects the company’s shares to rise or fall by as much as 17% over the next two months. According to Kramer, Tesla stock would likely trade anywhere between $265 to $375 over the next ~65 days. The Mott Capital founder also estimates that Tesla’s September options would likely see a lot of implied volatility on September, at roughly 50% — almost five times greater than the S&P 500’s implied volatility of 10%.

A key factor that would determine Tesla’s performance in the stock market for the next few months would be the Model 3 — a vehicle that Elon Musk aptly dubbed as a “bet-the-company” project. With Tesla attaining its Q2 2018 production target of manufacturing 5,000 Model 3 per week by the end of June, the electric car maker appears to be suggesting that its self-imposed “production hell” is about to end.

In a recent note, Argus Research analyst Bill Selesky backed the firm’s Buy rating for Tesla, placing a price target of $444 (a +36% upside potential) for the company’s stock. According to Selesky, Argus’ positive stance stands on an optimistic outlook for revenue gains from the Model S and X, as well as strong demand for the Model 3 sedan. The analyst further noted that while Tesla’s production figures for the Model 3 during the first quarter fell below its expectations, Argus believes that the company would show an improvement in the second quarter. Finally, Selesky stated that Model 3 production costs would likely diminish next year, enabling Tesla to achieve a healthy gross margin for the vehicle in late 2019.

“Although first quarter production of the Model 3 fell short of our forecast and management’s guidance, the company recently reached its 5,000 per week production target. As such, we expect significant sequential improvement in the second quarter. We expect the company to achieve its target gross margin of 25% on the Model 3 in late 2019, in line with the margins already achieved on the Model S and Model X,” Selesky wrote.

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Needham & Co’s Rajvindra Gill, however, released a note downgrading Tesla to a Sell, citing an uptick in cancellations for Model 3 orders. According to the analyst, Needham’s estimates suggest that Tesla’s refund rate for the Model 3 has outpaced deposits for the electric car.  

“Based on our checks, refunds are outpacing deposits as cancellations accelerate. The reasons are varied: extended wait times, the expiration of the $7,500 credit, and unavailability of the $35k base model. In August ’17, TSLA cited a refund rate of 12%. Almost a year later, we believe it has doubled and outpaced deposits. Model 3 wait times are currently 4-12 months, and with base model not available until mid-2019, consumers could wait until 2020,” the analyst wrote.

Since the beginning of July, Tesla appears to have gone all-in on the Model 3, pushing the vehicle to buyers through test drive programs and initiatives such as a 5-minute Sign & Drive delivery system. Signs over the past weeks also indicate that Tesla is all but accelerating its Model 3 push for the third quarter, with more than 19,000 new VINs filed so far in July, and a 19% increase in hiring activity since the month started. A vote of confidence for the company’s profitability also came recently from Detroit, after teardown specialist Sandy Munro stated that the Model 3’s Long Range RWD variant could give Tesla a 36% profit. Munro also estimates that the $35,000 base Model 3 could still give the electric car maker a profit of 18%.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Twitter co-founder Jack Dorsey endorses Elon Musk Tesla pay package

Dorsey framed the pay package as an engineering and governance crossroads for Tesla.

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1 day ago

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November 6, 2025

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Twitter co-founder and Square CEO Jack Dorsey has publicly backed Elon Musk’s leadership ahead of Tesla’s pivotal shareholder vote, which is expected to be decided later today at the company’s 2025 annual meeting. 

Dorsey framed the pay package as an engineering and governance crossroads for Tesla.

Dorsey’s public nod framed as an engineering defense of Musk

In a post on X, Dorsey weighed in on Tesla’s post about being in a “critical inflection point.” As per the Twitter-co-founder, the vote on Musk’s 2025 performance award is not about compensation. Instead, it’s about ensuring the path for the company’s engineering in the coming years. 

“This is not about compensation. it’s about ensuring a principled (and exciting!) engineering approach to the company’s future,” Dorsey wrote on his post, later stating that users of Cash app with TSLA shares would be able to vote for the CEO’s proposed 2025 performance award. 

Elon Musk appreciated Dorsey’s endorsement, responding to the Twitter co-founder’s post with a heart emoji. Musk has been pretty thankful for the support for is fellow tech executives, also thanking Michael Dell recently, who also advocated for its proposed 2025 performance award.

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Musk’s support

While Elon Musk’s 2025 performance award has received opposition from proxy advisors such as Glass Lewis and ISS, it has received quite a lot of support from longtime bulls such as ARK Invest, and, more recently, Schwab Asset Management following calls from TSLA retail shareholders. 

“Schwab Asset Management’s approach to voting on proxy matters is thorough and deliberate. We utilize a structured process that focuses on protecting and promoting shareholder value. We apply our own internal guidelines and do not rely on recommendations from Glass Lewis or ISS. In accordance with this process, Schwab Asset Management intends to vote in favor of the 2025 CEO performance award proposal. We firmly believe that supporting this proposal aligns both management and shareholder interests, ensuring the best outcome for all parties involved,” Charles Schwab told Teslarati.

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Elon Musk

Tesla Robotaxi and autonomy dreams lean on shareholders: Wedbush

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2 days ago

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November 5, 2025

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Credit: Tesla Europe & Middle East/X

Tesla’s dreams of developing a Robotaxi suite that utilizes a fully autonomous platform developed by the company’s top-tier talent now lean on shareholders and perhaps the most crucial vote in its history.

That’s what Dan Ives of Wedbush said in a new note to investors on Wednesday. As the Annual Shareholders’ Meeting is now just one day away, investors are down to their final chance to vote for or against Elon Musk’s new compensation plan.

Ives wrote that, while the company has made its intentions clear, wanting to maintain Musk, pay him accordingly, and give him the voting power he has long wanted, ultimately, the responsibility falls on investors.

As many retail shareholders have pushed for people to vote for Musk’s compensation package, there are a handful of large-scale funds and firms that have decided to go in another direction. Bullish Wall Street firms, Wedbush being one of them, believe it is crucial for Tesla to maintain Musk.

The vote could have major implications on whether Tesla launches an autonomous Robotaxi suite in the near future, Ives says:

“Getting Musk’s pay package approved tomorrow at the highly anticipated meeting will be a big step towards advancing Tesla’s future goals with the autonomous and Robotaxi roadmap ahead.”

While some investors are convinced the company is ready to go in a different direction simply based on Musk’s political involvement over the past year, many investors are under the impression that the development of Tesla’s autonomy suite, as well as its prowess in the EV sector, would fall if Elon were not at the helm.

Tesla’s Board of Directors has already stated that they have received confirmation that Musk’s political involvement would wind down in a timely manner. Moving forward, his focus will not veer from the mission of any of his companies; at least that’s what can be gathered from some of the Board’s communications over the past month.

Musk’s new compensation package is incentivized by performance metrics and will require him to achieve a handful of lofty tranches. He will not get paid unless he drives shareholder value, which is something many skeptics tend to leave out.

Ives continues:

“This new incentive-driven pay package for Musk would also provide an additional 423 million shares of common stock (~12% of shares), which would increase his ownership of Tesla up to ~25% voting power, which we believe was critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history. We believe this was the smart move by the Board to lay out these incentives/pay package at this key time as the biggest asset for Tesla is Musk…and with the AI Revolution, this is a crucial time for Tesla ahead with autonomous and robotics front and center.”

Wedbush maintained its Outperform rating and $600 price target on shares.

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UPDATE: Tesla investors push Charles Schwab for Musk comp plan clarification

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3 days ago

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November 4, 2025

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tesla cybertruck elon musk
Tesla CEO Elon Musk unveils futuristic Cybertruck in Los Angeles, Nov. 21, 2019 (Photo: Teslarati)

Update: 4:00 p.m. EDT – Charles Schwab has reached out to TESLARATI with the following statement, clarifying that it plans to vote FOR Musk’s compensation package:

“Schwab Asset Management’s approach to voting on proxy matters is thorough and deliberate. We utilize a structured process that focuses on protecting and promoting shareholder value. We apply our own internal guidelines and do not rely on recommendations from Glass Lewis or ISS. In accordance with this process, Schwab Asset Management intends to vote in favor of the 2025 CEO performance award proposal. We firmly believe that supporting this proposal aligns both management and shareholder interests, ensuring the best outcome for all parties involved.”
There have also been updates to the headline and various paragraphs to reflect this as well as accuracy.

Tesla investors are pushing Charles Schwab for clarification after it was expected to vote against CEO Elon Musk’s pay package.

Several high-profile Tesla influencers are speaking out against Charles Schwab, saying its decision to vote against the plan that would retain Musk as CEO and give him potentially more voting power if he can achieve the tranches set by the company’s Board of Directors.

The Tesla community appeared to see that Schwab is one firm that tends to vote against Musk’s compensation plans, as they also voted against the CEO’s 2018 pay package, which was passed by shareholders but then denied by a Delaware Chancery Court.

Schwab’s move was recognized by investors within the Tesla community and now they are speaking out about it:

At least six of Charles Schwab’s ETFs were expected to vote against Tesla’s Board recommendation to support the compensation plan for Musk. The six ETFs represent around 7 million Tesla $TSLA shares.

Jason DeBolt, an all-in Tesla shareholder, summarized the firm’s decision really well:

“As a custodian of ETF shares, your fiduciary duty is to vote in shareholders’ best interests. For a board that has delivered extraordinary returns, voting against their recommendations doesn’t align with retail investors, Tesla employees, or the leadership we invested to support. If Schwab’s proxy voting policies don’t reflect shareholder interests, my followers and I will move our collective tens of millions in $TSLA shares (or possibly hundreds of millions) to a broker that does, via account transfer as soon as this week.”
Tesla shareholders will vote on Musk’s pay package on Thursday at the Annual Shareholders Meeting in Austin, Texas.

It seems more likely than not that it will pass, but investors have made it clear they want a decisive victory, as it could clear the path for any issues with shareholder lawsuits in the future, as it did with Musk’s past pay package.

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