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Tesla may find Germany more accommodating than the United States, says VW CEO

(Credit: AUTO BILD/YouTube)

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In what seems to be yet another statement of support for Tesla, Volkswagen CEO Herbert Diess has noted that the electric car maker may find Germany a more accommodating place for EV manufacturing compared to the United States. The VW CEO’s comments were related during a conversation with analysts and investors on Monday. 

While addressing Tesla’s intention to build its Gigafactory 4 in Germany, Diess stated that Elon Musk is likely looking for a location that provides the environment and infrastructure that can foster the development and production of high-quality cars. The executive explained that this environment and infrastructure is present in Germany, but not so much in California, where Tesla is based. 

“What Tesla probably is looking for is the environment, the infrastructure, to build high-quality cars, which is probably much more the case here in Germany than on the West Coast of the United States,” he said

In a way, Diess’ statement does hold a lot of water considering that Germany is known for its mastery in automotive building. Thus, by tapping into the country’s talent base with its European Gigafactory, Tesla may be able to raise its vehicles’ quality to be up to par compared to premium German rivals such as Audi and Mercedes-Benz. Such a strategy could only be beneficial for Tesla in the long run. 

That being said, Tesla’s entry into Germany may also present some challenges, considering that the American automaker is known for its demanding workload for its employees. Tesla operates much like a Silicon Valley startup, and thus, its workers are known to work long hours regularly. It remains to be seen if Germany’s veteran automotive workforce would be open to such a tense environment.

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While Tesla and Volkswagen could be considered as rivals in the electric vehicle sphere, the automakers’ CEOs have developed a bond of sorts over the years. Diess, similar to Musk, is a strong proponent of electromobility, and this is something that the Tesla CEO has publicly acknowledged. Following a report criticizing Diess’ timing when he joined Volkswagen, for one, Musk was quick to defend the executive, stating that Diess is doing the most among automakers to go electric. 

“Herbert Diess is doing more than any big carmaker to go electric. The good of the world should come first. For what it’s worth, he has my support,” Musk wrote on Twitter. 

Diess, for his part, has returned the favor. The VW CEO was quick to correct members of the media when he was asked about Tesla and its “niche automaker” status, explaining that the Model 3 is a mass-produced vehicle. When Musk accepted the Golden Steering Wheel award in Germany recently, Diess also acknowledged that the Tesla CEO is pushing the industry forward. 

“This evening is very important because you now see electric cars (are) very competitive (and) winning an open competition. That’s why Tesla is very important for us because Elon is demonstrating that it works,” Diess said.

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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

Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm

ISS said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

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Tesla CEO Elon Musk’s $1 trillion pay package, which was proposed by the company last month, has hit its first bit of adversity from proxy advisory firm Institutional Shareholder Services (ISS).

Musk has called the firm “ISIS,” a play on its name relating it to the terrorist organization, in the past.

The pay package aims to lock in Musk to the CEO role at Tesla for the next decade, as it will only be paid in full if he is able to unlock each tranche based on company growth, which will reward shareholders.

However, the sum is incredibly large and would give Musk the ability to become the first trillionaire in history, based on his holdings. This is precisely why ISS is advising shareholders to vote against the pay plan.

The group said that Musk’s pay package will lock him in, which is the goal of the Board, and it is especially important to do this because of his “track record and vision.”

However, it also said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

The release from ISS called the size of Musk’s pay package “astronomical” and said its design could continue to pay the CEO massive amounts of money for even partially achieving the goals. This could end up in potential dilution for existing investors.

If Musk were to reach all of the tranches, Tesla’s market cap could reach up to $8.5 trillion, which would make it the most valuable company in the world.

Tesla has made its own attempts to woo shareholders into voting for the pay package, which it feels is crucial not only for retaining Musk but also for continuing to create value for shareholders.

Tesla launched an ad for Elon Musk’s pay package on Paramount+

Musk has also said he would like to have more ownership control of Tesla, so he would not have as much of an issue with who he calls “activist shareholders.”

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Investor's Corner

Barclays lifts Tesla price target ahead of Q3 earnings amid AI momentum

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

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Credit: Tesla China

Barclays has raised its price target for Tesla stock (NASDAQ: TSLA), with the firm’s analysts stating that the electric vehicle maker is approaching its Q3 earnings with two contrasting “stories.” 

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

Tesla’s AI and autonomy narrative

Levy told investors that Tesla’s “accelerating autonomous and AI narrative,” amplified by CEO Elon Musk’s proposed compensation package, is energizing market sentiment. The analyst stated that expectations for a Q3 earnings-per-share beat are supported by improved vehicle delivery volumes and stronger-than-expected gross margins, as noted in a TipRanks report.

Tesla has been increasingly positioning itself as an AI-driven company, with Elon Musk frequently emphasizing the long-term potential of its Full Self-Driving (FSD) software and products like Optimus, both of which are heavily driven by AI. The company’s AI focus has also drawn the support of key companies like Nvidia, one of the world’s largest companies today.

Still cautious on TSLA

Despite bullish AI sentiments, Barclays maintained its caution on Tesla’s underlying business metrics. Levy described the firm’s stance as “leaning neutral to slightly negative” heading into the Q3 earnings call, citing concerns about near-term fundamentals of the electric vehicle maker.

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Barclays is not the only firm that has expressed its concerns about TSLA stock recently. As per previous reports, BNP Paribas Exane also shared an “Underperform” rating on the company due to its two biggest products, the Robotaxi and Optimus, still generating “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” BNP Paribas, however, also estimated that Tesla will have an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040, and more than 11 million FSD subscriptions by 2030.

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Investor's Corner

BNP Paribas Exane initiates Tesla coverage with “Underperform” rating

The firm’s projections for Tesla still include an estimated 525,000 active Robotaxis by 2030.

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Credit: Tesla China

Tesla (NASDAQ: TSLA) has received a bearish call from BNP Paribas Exane, which initiated coverage on the stock with an Underperform rating and a $307 price target, about 30% below current levels. 

The firm’s analysts argued that Tesla’s valuation is driven heavily by artificial intelligence ventures such as the Robotaxi and Optimus, which are both still not producing any sales today.

Tesla’s valuation

In its note, BNP Paribas Exane stated that Tesla’s two AI-led programs, the Robotaxi and Optimus robots, generate “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” The research firm’s model projected a maximum bull-case valuation of $2.7 trillion through 2040, but after discounting milestone probabilities, its base-case valuation remained at $1.02 trillion.

The analysts described their outlook as optimistic toward Tesla’s AI ventures but cautioned that the stock’s “unfavorable risk/reward is clear,” adding that consensus earnings expectations for 2026 remain too high. Tesla’s market cap currently stands around $1.44 trillion with a trailing twelve-month revenue of $92.7 billion, which BNP Paribas argued does not justify Tesla’s P/E ratio of 258.59, as noted in an Investing.com report.

Tesla and its peers

BNP Paribas Exane’s report also included a comparative study of the “Magnificent Seven,” finding Tesla’s current market valuation as rather aggressive. “Our unique comparative analysis of the ‘Mag 7’ reveals the extreme nature of TSLA’s valuation, as the market implicitly says TSLA’s 2035 earnings (~55% of which will be driven by Robotaxi & Optimus, w/ zero sales now) have the same level of risk & value-appropriation as the ‘Mag 6’s’ 2026 earnings,” the firm noted.

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The firm’s projections for Tesla include an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040 priced above $20,000 each, and more than 11 million Full Self-Driving subscriptions by 2030. Interestingly enough, these seem to be rather optimistic projections for one of the electric vehicle maker’s more bearish estimates today.

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