 
									 
																		
									
									
								Investor's Corner
Tesla soars past $700 with help from optimism after strong EV sales in China
Tesla stock (NASDAQ: TSLA) soared past the $700 threshold earlier today after strong electric vehicle sales figures in China from rival companies promoted optimism regarding Tesla’s potential July delivery figures. Fueled by a recent price reduction of the Model 3 Standard Range+ variant in July, forward-looking projections could hint toward a strong July for Tesla, building upon the robust Q2 figures the company established in China.
Tesla has not surpassed the $700 level since late April 2021 and has experienced a tumultuous 2021 due to supply chain shortages and unexpected bottlenecks in production due to excessive demand. Tesla has continued to build upon a streak of quarters that have resulted in increases in production and delivery rates, along with eight straight marks of profitability following last week’s Q2 2021 Earnings Call.
But, news that helps Tesla stock is not always directly related to Tesla’s performance as an individual automaker. Reports out of China this morning were bullish for the EV sector as a whole, as domestic automakers Nio, Li Auto, and Xpeng reported strong delivery figures for July. Nio accumulated 7,931 deliveries, bringing its 2021 total to 49,887, a number that eclipses its 2020 delivery figures for the entire year. It was not a record month for Nio, as June had 152 more vehicle deliveries, but the overall outlook is increasing due to Year-to-Date figures thus far. Nio stock rose 3% on news of its growth story. Li Auto was up 3.2% on news that it delivered 8,589 vehicles in July, a record for the company. Xpeng also traded at a gain of 7.3% and established a new monthly record with 8,040 vehicle deliveries.
This brings in the potential momentum builder for Tesla. The company has regularly been atop the vehicle sales leaderboard in China with the Model 3 and Model Y, dominating much of the competition and only being eclipsed by the Wuling HongGuang Mini EV, which is priced significantly lower due to less standard features. As domestic EV companies in China continue to build upon their growing sales figures monthly, Tesla, with its strong consumer base, favorable vehicle quality, and wide range of options, is looking to set another month aside with delivery figures that could rival its own records.
In June, Tesla delivered 33,155 vehicles, just a few hundred units off of its strong May, which yielded 33,463 cars making their way to customers. The small slide in delivery figures is not a concern, however. The CPCA recently stated that the EV market is expected to more than double to 2.4 million units this year, setting Tesla up for a continuing growth trend as the second half of 2021 kicks off. Unlike other automakers, Tesla does not report its delivery figures. They are instead compiled by the CPCA and will be published later this month. Expectations are that Tesla could deliver strong figures after reducing the price of its SR+ Model 3 in July.
Tesla Model 3 Standard Range Plus becomes even more competitive in China
The bullish trend of the EV market in China continues to work in favor of Tesla, which has established itself as the main player in the electric vehicle market in the country.
At the time of writing, Tesla stock was trading at $716.27, up 4.23%.
Disclosure: Joey Klender is a TSLA Shareholder.
What do you think? Let us know in the comments below, or be sure to email me at joey@teslarati.com or on Twitter @KlenderJoey.
Investor's Corner
Tesla investor Calpers opposes Elon Musk’s 2025 performance award
Musk’s 2025 pay plan will be decided at Tesla’s 2025 Annual Shareholder Meeting, which will be held on November 6 in Giga Texas.
 
														One of the United States’ largest pension funds, the California Public Employees’ Retirement System (Calpers), has stated that it will be voting against Elon Musk’s 2025 Tesla CEO performance award.
Musk’s 2025 pay plan will be decided at Tesla’s 2025 Annual Shareholder Meeting, which will be held on November 6 in Giga Texas. Company executives have stated that the upcoming vote will decide Tesla’s fate in the years to come.
Why Calpers opposes Musk’s 2025 performance award
In a statement shared with Bloomberg News, a Calpers spokesperson criticized the scale of Musk’s proposed deal. Calpers currently holds about 5 million Tesla shares, giving its stance meaningful influence among institutional investors.
“The CEO pay package proposed by Tesla is larger than pay packages for CEOs in comparable companies by many orders of magnitude. It would also further concentrate power in a single shareholder,” the spokesperson stated.
This is not the first time Calpers has opposed a major Musk pay deal. The fund previously voted against a $56 billion package proposed for Musk and criticized the CEO’s 2018 performance-based plan, which was perceived as unrealistic due to its ambitious nature at the time. Musk’s 2018 pay plan was later struck down by a Delaware court, though Tesla is currently appealing the decision.
Musk’s 2025 CEO Performance Award
While Elon Musk’s 2025 performance award will result in him becoming a trillionaire, he would not be able to receive any compensation from Tesla unless aggressive operational and financial targets are met. For Musk to receive his full compensation, for example, he would have to grow Tesla’s market cap from today’s $1.1 trillion to $8.5 trillion, effectively making it the world’s most valuable company by a mile.
Musk has also maintained that his 2025 performance award is not about compensation. It’s about his controlling stake at Tesla. “If I can just get kicked out in the future by activist shareholder advisory firms who don’t even own Tesla shares themselves, I’m not comfortable with that future,” Musk wrote in a post on X.
Investor's Corner
Tesla enters new stability phase, firm upgrades and adjusts outlook
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
 
														Tesla is entering a new phase of stability in terms of vehicle deliveries, one firm wrote in a new note during the final week of October, backing its position with an upgrade and price target increase on the stock.
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
While most firms are interested in highlighting Tesla’s future growth, which will be catalyzed mostly by the advent of self-driving vehicles, autonomy, and the company’s all-in mentality on AI and robotics, Pozdnyakov is solely focusing on vehicle deliveries.
The analyst wrote in a note to investors that he believes Tesla’s updated vehicle lineup, which includes its new affordable “Standard” trims of the Model 3 and Model Y, is going to stabilize the company’s delivery volumes and return the company to annual growth.
Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings
Tesla launched the new affordable Model 3 and Model Y “Standard” trims on October 7, which introduced two stripped-down, less premium versions of the all-electric sedan and crossover.
They are both priced at under $40,000, with the Model 3 at $37,990 and the Model Y at $39,990, and while these prices may not necessarily be what consumers were expecting, they are well under what Kelley Blue Book said was the average new car transaction price for September, which swelled above $50,000.
Despite the rollout of these two new models, it is interesting to hear that a Wall Street firm would think that Tesla is going to return to more stable delivery figures and potentially enter a new growth phase.
Many Wall Street firms have been more focused on AI, Robotics, and Tesla’s self-driving project, which are the more prevalent things that will drive investor growth over the next few years.
Wedbush’s Dan Ives, for example, tends to focus on the company’s prowess in AI and self-driving. However, he did touch on vehicle deliveries in the coming years in a recent note.
Ives said in a note on October 2:
“While EV demand is expected to fall with the EV tax credit expiration, this was a great bounce-back quarter for TSLA to lay the groundwork for deliveries moving forward, but there is still work to do to gain further ground from a delivery perspective.”
Tesla has some things to figure out before it can truly consider guaranteed stability from a delivery standpoint. Initially, the next two quarters will be a crucial way to determine demand without the $7,500 EV tax credit. It will also begin to figure out if its new affordable models are attractive enough at their current price point to win over consumers.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
 
														Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
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