Investor's Corner
Tesla stock slides 9% amid reports that Elon Musk and board will meet with SEC next week
Tesla stock (NASDAQ:TSLA) was down as much as 9%, hitting a low of $305.70 during intraday trading on Friday, amid reports that Elon Musk and the electric car maker’s board of directors are preparing to meet with the Securities and Exchange Commission as early as next week. The upcoming meeting with the SEC will reportedly be focused on how Musk announced and handled the aftermath of his tweet last week, when he stated that funding was “secured” for Tesla’s possible privatization at $420 per share.
The Tesla CEO recently admitted in an hourlong interview with the New York Times that he was getting exhausted, and that the pressure from the Model 3 ramp and attacks from TSLA short-sellers are contributing to his stress. Interspersed with Musk’s interview in the NYT piece were statements from several unnamed sources who alleged that the board had been angry at Musk over his go-private tweets, and that the board was worried about the CEO’s use of the drug Ambien. Honest and raw quotes from Elon Musk, such as his statement that “from a personal pain standpoint, the worst is yet to come” despite Tesla’s progress in its operations, painted a rather gloomy picture of the company — particularly its leader.
Tesla has had to deal with several pieces of negative news this week. Just recently, Tesla’s alleged saboteur and self-proclaimed “whistleblower” Martin Tripp published pictures of supposedly damaged Model 3 battery packs that were reportedly installed on vehicles. The photos, as well as a list of Model 3 VINs allegedly equipped with the damaged batteries, were picked up by several media outlets before Tripp decided to delete his Twitter account. Stuart D. Meissner, Tripp’s lawyer in his countersuit against Tesla, also took on another client — Karl Hansen, a former Tesla security employee at Gigafactory 1, who is also suing the electric car maker.
Hansen’s claims against Tesla rival those of Martin Tripp’s, with the former employee alleging that Tesla did not disclose the theft of $37 million worth of copper and raw materials that were stolen from Gigafactory in the first half of 2018. Hansen also accused Tesla of wiretapping and hacking employees’ computers and mobile phones. Capping off Hansen’s lawsuit was his grandest claim yet — that Tesla did not disclose to law enforcement and the US Drug Enforcement Agency that some Gigafactory employees were involved in drug trafficking. Tesla, for its part, denied Hansen’s accusations.
“Mr. Hansen’s allegations were taken very seriously when he brought them forward. Some of his claims are outright false. Others could not be corroborated, so we suggested additional investigative steps to try and validate the information he had received second-hand from a single anonymous source. Because we wanted to be sure we got this right, we made numerous attempts to engage further with Mr. Hansen to understand more about what he was claiming and the work that he did in reaching his conclusions. He rejected each of those attempts, and to date has refused to speak with the company further. It seems strange that Mr. Hansen would claim that he is concerned about something happening within the company, but then refuse to engage with the company to discuss the information that he believes he has.”
Tesla was also hit with reports alleging that the company was sending workers from GA3 home early despite not meeting the day’s production goal. UBS also claimed in a report that Tesla’s $35,000 Standard trim Model 3 would cause the company to lose $5,900 on every vehicle sold. UBS’ findings stand in stark contrast to conclusions drawn by Detroit veteran Sandy Munro, who estimated that the $35,000 base Model 3 should give Tesla a profit margin of 18% after conducting a thorough teardown of the electric sedan.
Amidst the negativity surrounding the stock, Tesla received some votes of confidence this week. Several Wall Street analysts, including known TSLA bears, raised their price targets for the company. Auto analysts from Evercore ISI also concluded after an extensive tour of Tesla’s Fremont factory — particularly the Model 3 assembly lines — that the company should be able to hit a production rate of 8,000 Model 3 per week with very little capital expenditure. The Evercore ISI analysts further noted that Tesla is well on its way to achieving a steady weekly production rate of 5,000-6,000 Model 3 per week.
With its latest drop, Tesla shares are now down 0.9% in 2018, compared to the S&P 500’s 6% gain. As of writing, Tesla stock is trading -8.19% at $307.97 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Tesla sits at a ‘crossroads,’ Wedbush says by listing six negatives
Wedbush is still bullish on Tesla, but says Elon Musk needs to make a choice between DOGE and the car company.
According to Wedbush, Tesla is sitting at a “crossroads” as it nears its Q1 2025 Earnings Call on Tuesday.
Although the company’s Earnings Calls have been primarily focused on the financials and accomplishments of the past quarter, Tesla is approaching this one differently.
Tesla has even said that this Earnings Call will feature a “company update,” and as most believe it will detail plans for future models and production timelines, others have different expectations and beliefs over what could be said.
Tesla still on track to release more affordable models in 1H25
Wedbush’s Dan Ives believes Tesla is at a crossroads and outlined his six biggest concerns for the company since CEO Elon Musk took on a role within the White House at the Department of Government Efficiency (DOGE):
- Tesla has now unfortunately become a political symbol globally of the Trump Administration/DOGE
- Tesla’s stock has been crushed since Trump stepped back into the White House
- Brand damage to Musk/Tesla resulted in a terrible 1Q delivery number, with much lower 2025 deliveries on the horizon
- Protests and violence against Tesla dealerships/owners have erupted around the globe
- 25% auto tariffs have been enacted, delaying future lower-cost models for Tesla, even though Musk is vocally against the tariffs for obvious reasons
- Potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE
Ives has held onto the idea that Musk’s involvement has made Tesla synonymous with the Trump administration, but that only seems to be true for those who share ideologies that oppose what the White House is doing.
Others are able to differentiate between the two, noting that Tesla is not a Trump organization, and vice versa.
Of course, there are negative sides to Musk splitting his time between the two and having ties to the President. Politically, it is hard to appease everyone.
Despite this, Wedbush’s Ives said the firm still remains bullish on Tesla:
“So why stay bullish? It’s a great question. We believe Tesla along with Nvidia are two of the most disruptive technology companies on the globe over the coming years. The unparalleled innovation, engineering scale, autonomous roadmap, and robotics future will unleash massive valuation upside over the coming years in our view. BUT….Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time. Tesla is Musk and Musk is Tesla….and anyone that thinks the brand damage Musk has inflicted is not a real thing….spend some time speaking to car buyers in the US, Europe, and Asia…you will think differently after those discussions.”
Ives said that Musk needs to lay out the timing and rollout plans for the unsupervised Full Self-Driving and for the affordable vehicle platform, which was set for release in the first half of the year.
Investor's Corner
Tesla “best positioned” for Trump tariffs among automakers: analyst
Ives has a price target of $315 per share for the electric vehicle maker.
Wedbush analyst Dan Ives recently shared his thoughts about Tesla (NASDAQ:TSLA) amidst the Trump administration’s tariffs. As per Ives, Tesla is best-positioned relative to its rivals when it comes to the ongoing tariff issue.
Ives has a price target of $315 per share for the electric vehicle maker.
Best Positioned
During an interview with Yahoo Finance, the segment’s hosts asked about his thoughts on Tesla, especially considering Musk’s work with the Trump administration. Musk has previously stated that the effects of tariffs on Tesla are significant due to parts that are imported from abroad.
“When it comes to the tariff issue, they are actually best positioned relative to the Detroit Big Three and others and obviously foreign automakers. Still impacted, Musk has talked about that, in terms of just auto parts,” Ives stated.
China and Musk
Ives also stated that ultimately, a big factor for Tesla in the coming months may be the Chinese market’s reactions to its tariff war. He also noted that the next few quarters will be pivotal for Tesla considering the brand damage that Elon Musk has incited due to his politics and work with the Trump administration.
“When it comes to Tesla, I think the worry is where does retaliatory look like in China, in terms of buying domestic. I think that’s something that’s a play. And they have a pivotal six months head, in terms of what everything we see in Austin, autonomous, and the buildout.
“But the brand issues that Musk self-inflicted is dealing with in terms of demand destruction in Europe and the US. And that’s why this is a key few quarters ahead for Tesla and also for Musk to make, in my opinion, the right decision to take a step back from the administration,” Ives noted.
Investor's Corner
Tesla negativity “priced into the stock at its current levels:” CFRA analyst
The CFRA analyst has given Tesla a price target of $360 per share.
In recent comments to the Schwab Network, CFRA analyst Garrett Nelson stated that a lot of the “negative sentiment towards Tesla (NASDAQ:TSLA) is priced into the stock at its current levels.”
The CFRA analyst has given Tesla a price target of $360 per share.
Q1 A Low Point in Sales
The CFRA analyst stated that Tesla’s auto sales likely bottomed last quarter, as noted in an Insider Monkey report. This was, Nelson noted, due to Q1 typically being the “weakest quarter for automakers.” He also highlighted that all four of Tesla’s vehicle factories across the globe were idled in the first quarter.
While Nelson highlighted the company’s changeover to the new Model Y as a factor in Q1, he also acknowledged the effects of CEO Elon Musk’s politics. The analyst noted that while Tesla lost customers due to Musk’s political opinions, the electric vehicle maker has also gained some new customers in the process.
CFRA’s Optimistic Stance
Nelson also highlighted that Tesla’s battery storage business has been growing steadily over the years, ending its second-best quarter in Q1 2025. The analyst noted that Tesla Energy has higher margins than the company’s electric vehicle business, and Tesla itself has a very strong balance sheet.
The CFRA analyst also predicted that Tesla could gain market share in the United States because it has less exposure to the Trump administration’s tariffs. Teslas are the most American-made vehicles in the country, so the Trump tariffs’ effects on the company will likely be less notable compared to other automakers that produce their cars abroad.
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