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Tesla bulls take a stand against negative TSLA narratives in Q3’s aftermath

A snapshot from a drone flyover of the Tesla Fremont factory on June 29, 2018. [Credit: DarkSoldier 360/YouTube]

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Tesla (NASDAQ:TSLA) bulls are taking a stand as pervading negative narratives sweep TSLA following the release of the electric car maker’s third-quarter results. Tesla hit new records in Q3, producing 96,155 vehicles and delivering around 97,000. These record numbers, which were 3,000 off a target quoted in a leaked Elon Musk email, resulted in a steep drop in TSLA and an unforgiving interpretation from the company’s ardent critics. 

As the electric car maker deals with the aftermath of its record-breaking third-quarter results, a number of TSLA bulls have taken a stand with their optimistic take on the company’s Q3 figures. While these analysts admitted that Tesla was not able to meet Elon Musk’s internal 100,000 delivery goal for the third quarter, some were firm in the notion that Tesla’s 16.2% year-over-year improvement in deliveries was nothing to scoff at either. 

Longtime TSLA bull and Baird analyst Ben Kallo reiterated his “Outperform” rating and $355 price target on the electric car maker following the company’s release of its Q3 2019 results. Macquarie analyst Maynard Um, another notable TSLA bull, kept his “Outperform” rating and optimistic $400 price target for Tesla as well. Commenting on Tesla’s production and delivery results, Um was direct, stating that “we are not concerned about demand.”

Canaccord Genuity also maintained its “Buy” rating on Tesla, together with its $350 price target. According to the financial firm, Tesla reported “essentially inline Q3 deliveries with record net new orders.” Canaccord added that it is “encouraged that production woes appear to have abated” for the electric car maker, as shown in Tesla’s record numbers. 

Even Wedbush Securities, whose TSLA analyst Dan Ives has expressed frustration at the electric car maker in previous quarters, maintained its “Neutral” rating and $220 price target on the company. Wedbush noted that “In our opinion, this was an impressive delivery number for Tesla overall that should be viewed as a positive step in the right direction.”

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Loup Ventures managing partner Gene Munster, also a longtime TSLA bull, pointed to a particularly interesting detail in the company’s Q3 report. In a blog post on Loup Ventures’ official website, Munster stated that in the third quarter, Tesla appears to have established the fact that its vehicles have a stable, organic demand among consumers. 

“The optics of the announcement may have been diluted, but the substance was impressive. Tesla built and sold a record number of vehicles in Q3. Deliveries were up 16% y/y on a tough comp from Q3 of 2018 when deliveries more than doubled sequentially to 83k. In the update letter, the company said that they achieved record net orders and that nearly all of those orders came from people without previous reservations. In other words, all signs point to the fact that organic demand, which is the crux of the bull/bear debate, is intact,” he wrote. 

Objectively speaking, Q3 2019 was a successful quarter for Tesla, and despite the pervading negative narrative surrounding the company, the fact remains that the electric car maker just reached record numbers once more, and it is not showing any signs of slowing down. With Gigafactory 3’s Model 3 production seemingly just around the corner, it is likely far too early or simply unwise to dismiss Tesla’s chances of meeting its self-imposed delivery goals for 2019.

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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Investor's Corner

Shareholder group urges Nasdaq probe into Elon Musk’s Tesla 2025 CEO Interim Award

The SOC Investment Group represents pension funds tied to more than two million union members, many of whom hold shares in TSLA.

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Credit: xAI/X

An investment group is urging Nasdaq to investigate Tesla (NASDAQ:TSLA) over its recent $29 billion equity award for CEO Elon Musk. 

The SOC Investment Group, which represents pension funds tied to more than two million union members—many of whom hold shares in TSLA—sent a letter to the exchange citing “serious concerns” that the package sidestepped shareholder approval and violated compensation rules.

Concerns over Tesla’s 2025 CEO Interim Award

In its August 19 letter to Nasdaq enforcement chief Erik Wittman, SOC alleged that Tesla’s board improperly granted Musk a “2025 CEO Interim Award” under the company’s 2019 Equity Incentive Plan. That plan, the group noted, explicitly excluded Musk when it was approved by shareholders. SOC argued that the new equity grant effectively expanded the plan to cover Musk, a material change that should have required a shareholder vote under Nasdaq rules.

The $29 billion package was designed to replace Musk’s overturned $56 billion award from 2018, which the Delaware Chancery Court struck down, prompting Tesla to file an appeal to the Delaware Supreme Court. The interim award contains restrictions: Musk must remain in a leadership role until August 2027, and vested shares cannot be sold until 2030, as per a Yahoo Finance report.

Even so, critics such as SOC have argued that the plan does not have of performance targets, calling it a “fog-the-mirror” award. This means that “If you’re around and have enough breath left in you to fog the mirror, you get them,” stated Brian Dunn, the director of the Institute for Comprehension Studies at Cornell University.

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SOC’s Tesla concerns beyond Elon Musk

SOC’s concerns extend beyond the mechanics of Musk’s pay. The group has long questioned the independence of Tesla’s board, opposing the reelection of directors such as Kimbal Musk and James Murdoch. It has also urged regulators to review Tesla’s governance practices, including past proposals to shrink the board. 

SOC has also joined initiatives calling for Tesla to adopt comprehensive labor rights policies, including noninterference with worker organizing and compliance with global labor standards. The investment group has also been involved in webinars and resolutions highlighting the risks related to Tesla’s approach to unions, as well as labor issues across several countries.

Tesla has not yet publicly responded to SOC’s latest letter, nor to requests for comment.

The SOC’s letter can be viewed below.

Nasdaq+Letter Tsla Socig Final by Simon Alvarez

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Investor's Corner

Tesla investors may be in for a big surprise

All signs point toward a strong quarter for Tesla in terms of deliveries. Investors could be in for a surprise.

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(Credit: Tesla)

Tesla investors have plenty of things to be ecstatic about, considering the company’s confidence in autonomy, AI, robotics, cars, and energy. However, many of them may be in for a big surprise as the end of the $7,500 EV tax credit nears. On September 30, it will be gone for good.

This has put some skepticism in the minds of some investors: the lack of a $7,500 discount for buying a clean energy vehicle may deter many people from affording Tesla’s industry-leading EVs.

Tesla warns consumers of huge, time-sensitive change coming soon

The focus on quarterly deliveries, while potentially waning in terms of importance to the future, is still a big indicator of demand, at least as of now. Of course, there are other factors, most of them economic.

The big push to make the most of the final quarter of the EV tax credit is evident, as Tesla is reminding consumers on social media platforms and through email communications that the $7,500 discount will not be here forever. It will be gone sooner rather than later.

It appears the push to maximize sales this quarter before having to assess how much they will be impacted by the tax credit’s removal is working.

Delivery Wait Time Increases

Wait times for Tesla vehicles are increasing due to what appears to be increased demand for the company’s vehicles. Recently, Model Y delivery wait times were increased from 1-3 weeks to 4-6 weeks.

This puts extra pressure on consumers to pull the trigger on an order, as delivery must be completed by the cutoff date of September 30.

Delivery wait times may have gone up due to an increase in demand as consumers push to make a purchase before losing that $7,500 discount.

More People are Ordering

A post on X by notable Tesla influencer Sawyer Merritt anecdotally shows he has been receiving more DMs than normal from people stating that they’re ordering vehicles before the end of the tax credit:

It’s not necessarily a confirmation of more orders, but it could be an indication that things are certainly looking that way.

Why Investors Could Be Surprised

Tesla investors could see some positive movement in stock price following the release of the Q3 delivery report, especially if all signs point to increased demand this quarter.

We reported previously that this could end up being a very strong rebounding quarter for Tesla, with so many people taking advantage of the tax credit.

Whether the delivery figures will be higher than normal remains to be seen. But all indications seem to point to Q3 being a very strong quarter for Tesla.

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Tesla bear Guggenheim sees nearly 50% drop off in stock price in new note

Tesla bear Guggenheim does not see any upside in Robotaxi.

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tesla showroom
Credit: Tesla

Tesla bear Guggenheim is still among the biggest non-believers in the company’s overall mission and its devotion to solving self-driving.

In a new note to investors on Thursday, analyst Ronald Jewsikow reiterated his price target of $175, a nearly 50 percent drop off, with a ‘Sell’ rating, all based on skepticism regarding Tesla’s execution of the Robotaxi platform.

A few days ago, Tesla CEO Elon Musk said the company’s Robotaxi platform would open to the public in September, offering driverless rides to anyone in the Austin area within its geofence, which is roughly 90 square miles large.

Tesla CEO Elon Musk confirms Robotaxi is opening to the public: here’s when

However, Jewsikow’s skepticism regarding this timeline has to do with what’s going on inside of the vehicles. The analyst was willing to give props to Robotaxi, saying that Musk’s estimation of a September public launch would be a “key step” in offering the service to a broader population.

Where Jewsikow’s real issue lies is with Tesla’s lack of transparency on the Safety Monitors, and how bulls are willing to overlook their importance.

Much of this bullish mentality comes from the fact that the Monitors are not sitting in the driver’s seat, and they don’t have anything to do with the overall operation of the vehicle.

Musk also said last month that reducing Safety Monitors could come “in a month or two.”

Instead, they’re just there to make sure everything runs smoothly.

Jewsikow said:

“While safety drivers will remain, and no timeline has been provided for their removal, bulls have been willing to overlook the optics of safety drivers in TSLA vehicles, and we see no reason why that would change now.”

He also commented on Musk’s recent indication that Tesla was working on a 10x parameter count that could help make Full Self-Driving even more accurate. It could be one of the pieces to Tesla solving autonomy.

Jewsikow added:

“Perhaps most importantly for investors bullish on TSLA for the fleet of potential FSD-enabled vehicles today, the 10x higher parameter count will be able to run on the current generation of FSD hardware and inference compute.”

Elon Musk teases crazy new Tesla FSD model: here’s when it’s coming

Tesla shares are down just about 2 percent today, trading at $332.47.

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