Investor's Corner
Wall St’s reaction to Daimler’s reduced earnings guidance highlights critical eye on TSLA
German automaker Daimler AG had a pretty tough Monday. Following an announcement on Sunday that it is cutting its 2019 earnings guidance over the effects of an ongoing diesel emissions scandal at Mercedes-Benz, the company’s shares declined 3.6% in Frankfurt. The carmaker has noted that it is currently facing a “high three-digit million” euro increase in charges related to the diesel scandal, which would likely result in its 2019 earnings being about the same as 2018’s.
Daimler’s diesel troubles were highlighted on Friday, when Germany’s vehicle authority, the Federal Motor Transport Authority (KBA), issued a forced recall against the automaker for allegedly using an illegal shut-off device for the diesel-powered Mercedes-Benz GLK 220. The KBA is looking to extend its investigation into the carmaker further, as the cheating devices were reportedly used in Daimler’s OM642 and OM651 engines, which are equipped in popular vehicles such as the Mercedes-Benz C-Class and E-Class. The initial recall currently covers 60,000 units of the GLK, though the number could be as high as 700,000 vehicles if it covers other vehicles using the OM642 and OM651 engines, according to German publication Bild am Sonntag.
Apart from the KBA investigation in Germany, Daimler has noted in its first-quarter earnings release that it is facing an emissions probe by the US Justice Department. The company is also facing a consumer-class action lawsuit in the United States along with Bosch, one of its suppliers, for allegedly conspiring to deceive US regulators. These could prove to be a stumbling block for the company, particularly as it attempts to breach the premium electric vehicle market with the Mercedes-Benz EQC, which is expected to compete against EV veterans such as the Tesla Model X.
Amidst these recent headwinds, Wall St. analyst Dan Ives from Wedbush Securities noted in a statement to CNBC that Daimler currently needs to perform a “balancing act” as it attempts to weather these challenging times. “This really handcuffs them a bit. It’s going to be a balancing act, they really need to hold investor’s hands on this, and the question is ‘Can they navigate these headwinds?’ It’s an arms race in the electric vehicle world right now,” Ives said.
The Wedbush analyst’s reaction to the developments at Daimler is quite compelling. The automaker’s challenges today are serious, yet Ives’ comments were quite restrained. Considering that the automaker is facing another diesel emissions scandal and a “high three-digit million” euro increase in charges that will result in reduced 2019 profits, the circumstances might very well handcuff Daimler more than “a bit.” Ives’ tempered response to the German automaker’s update ultimately stands in stark contrast with his reactions to Tesla. Following Tesla’s Q1 earnings call, which revealed yet another loss for the company, Ives practically bordered on the subjective, seemingly mocking Musk’s continued optimism in future quarters.
“We view this quarter as one of (the) top debacles we have ever seen, while Musk & Co., in an episode out of the Twilight Zone, act as if demand and profitability will magically return to the Tesla story. As such, we no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on (the) reality around demand issues which is the core focus of investors” Ives wrote in a note to Wedbush’s clients.
Following a leaked email from Elon Musk urging employees to cut costs, Ives also issued a note describing the electric car maker’s circumstances as a “code red situation,” adding that Tesla faces a “Kilimanjaro-like uphill climb” as it attempts to hit its profitability targets this 2019. Quite interestingly, Ives’ comments likely helped push TSLA stock down over 4% then, which was more than Daimler’s drop on Monday. It should be noted that none of these dramatic tones were present in Ives’ comments about the German automaker’s recent updates. This is quite ironic considering his colorful reactions to Tesla’s developments were rooted only in speculations, while Daimler’s current headwinds are the result of an actual investigation by Germany’s Federal Motor Transport Authority (KBA).
During Tesla’s annual shareholder meeting, several TSLA shareholders brought up the issue of the negative narrative and misinformation surrounding the company. Elon Musk noted that these misconceptions are distressing, though he admitted that he is at a loss as to how to change the negative narrative surrounding Tesla. For the electric car maker, perhaps the best way to address all the skepticism is to simply hit its self-imposed, ambitious targets, such as delivering over 90,000 vehicles to customers this quarter, or reclaiming profitability in the second half of 2019.
Disclosure: I have no ownership in shares of Tesla or Daimler, and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla just did something in South Korea that no foreign carmaker has ever done
Tesla’s Model Y just became South Korea’s best-selling car, beating every domestic model in May.
Tesla did something last month that no foreign car has ever done in South Korea by outselling every vehicle in the country, domestic or imported, finishing the month with Model Y as the single best-selling car across the entire Korean market. According to data from the Korea Automobile Importers and Distributors Association released on June 4, the Model Y recorded 8,762 units sold in May, pushing the Kia Sorento into second place at 7,836 units and the Hyundai Grandeur into third at 5,183 units. It is the first time an imported vehicle has outsold every domestic model on a single-month basis.
Tesla imported 10,866 cars into South Korea in May, making it the top import brand for the fourth consecutive month. BMW followed at 6,555 units, less than two-thirds of Tesla’s total, while BYD registered just 1,032 units. The combined domestic sales of GM Korea, Renault Korea, and KG Mobility last month totaled just 7,019 units, meaning a single Tesla model outsold three Korean automakers combined.
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South Korea has historically been one of the hardest markets for foreign automakers to crack. Hyundai and Kia together control close to 70% of the overall market and carry deep consumer loyalty built over decades. Tesla’s path into this market was an uphill battle due to high import duties, limited service infrastructure, and early skepticism about charging networks. In 2024, the Model Y was the best-selling imported car in South Korea with 18,717 units for the full year. By 2025, after the Juniper refresh, it cleared 50,000 units and took the top spot among all EVs.
Year to date, Tesla has a 250.8% increase in the country over the same period last year, and now holds a 30.8% share of the entire imported car segment for 2026. EVs as a category represented 48.6% of all imported passenger car registrations in May. As Teslarati has reported, the Juniper refresh brought meaningful improvements to range, interior quality, and ride refinement that addressed the most common criticisms of earlier Model Y versions. Those upgrades appear to be resonating in markets like South Korea where buyers compare Tesla directly against high end domestic competitors.
The Ontario Teachers’ Pension Plan (OTPP) stands to reap one of the most extraordinary returns in pension fund history thanks to a bold 2019 investment in SpaceX.
According to a recent report from The Globe and Mail, the Toronto-based fund invested roughly $300 million CAD (~$220 million USD at the time) in Elon Musk’s space company as its inaugural deal through the Teachers’ Innovation Platform.
At SpaceX’s anticipated $1.75 trillion IPO valuation, set for a mid-June debut on Nasdaq under ticker $SPCX, that stake could now be worth up to $11.6 billion USD. This would represent a roughly 50x return and easily become OTPP’s most successful single investment ever.
The fund manages $279 billion in assets for approximately 346,000 working and retired teachers in Ontario, potentially delivering an average boost of around $33,500 per member if fully realized.
SpaceX has filed its S-1 and plans to price shares at $135 each, aiming to raise a record $75 billion in what would be the largest IPO in history, surpassing Saudi Aramco. The company reported $18.67 billion in revenue for 2025, driven primarily by Starlink satellite internet growth and NASA contracts, though it continues to post significant losses tied to ambitious R&D in Starship and AI initiatives.
Important pieces moving forward include:
- Starlink Expansion: The satellite broadband service is scaling rapidly, targeting global connectivity, especially in underserved rural and remote areas. This segment offers massive recurring revenue potential as numbers climb.
- Starship and Reusability Leadership: SpaceX’s fully reusable Starship aims to slash launch costs dramatically, enabling frequent missions, Mars ambitions, and lucrative government/defense contracts. Success here could unlock exponential growth.
- AI and Diversification: Recent moves, including ties to xAI, position SpaceX in high-growth AI infrastructure, broadening beyond traditional aerospace.
- Validation Scrutiny: While the $1.75 trillion target excites investors, analysts like Morningstar value the company closer to $780 billion, citing high multiples (around 90x trailing revenue) and execution risks. A 180-day lockup period will prevent early investors like OTPP from selling immediately post-IPO.
The irony has not been lost on observers. Ontario’s government previously canceled a Starlink rural internet contract amid political tensions involving Musk, yet the pension fund’s savvy investment, made when SpaceX was valued around $33-36 billion, and Starlink was nascent, delivers outsized gains independent of politics.
For OTPP, this windfall strengthens its already solid 111 percent funding ratio and underscores the value of patient, innovation-focused capital allocation.
For SpaceX, the IPO marks a new chapter: greater transparency, access to public markets for talent retention and growth capital, and heightened pressure to deliver on its multi-planetary vision.
All eyes are fixed on whether SpaceX can justify its lofty valuation through sustained execution. For Ontario teachers, the returns are already stellar, but SpaceX, like other Musk companies in the past, has plenty of things to prove. Perhaps the most ideal person for the job is at the helm, hoping to bring the company to a massive valuation.
Tesla has its answer to grow its automotive sales over the next few years, TD Cowen analyst Itay Michaeli says, but it just has to bring it to the U.S.
On Thursday, Michaeli reiterated his $490 price target and the ‘Buy’ rating he already held on Tesla stock (NASDAQ: TSLA). However, its automotive division has struggled to show sequential growth over the past few years, mostly due to its focus on AI and Full Self-Driving. Tesla already axed two of its lower-volume vehicles with the Model S and Model X earlier this year.
However, Tesla does not need to engineer an entire new vehicle to trigger an upward tick in sales; it just has to bring it from China to the U.S., Michaeli said.
He is talking about the Model Y L, a slightly larger version of the all-electric crossover that is already available in China. U.S. customers have been pleading with CEO Elon Musk to bring it to the country since its launch in Asia last year, but he’s not convinced of it because of the advent of self-driving and its importance in this particular market.
The problem is that Tesla owners have been requesting something larger that could fit a typical American family. The Model Y L is slightly larger than the standard Model Y, but some are concerned that it could still be too small to fit what most people might need.
Instead, they have asked for a full-size SUV from Tesla.
Tesla gives big hint that it will build Cyber SUV, smaller Cybertruck
Nevertheless, the Model Y L still presents a great opportunity for Tesla in the U.S., and Michaeli says that there is an additional sales opportunity of about 100,000 units, with demand potential falling somewhere between 60,000 and 135,000 units.
TD Cowen’s note to investors also analyzed that Tesla’s growth could come from a stock perspective as well, positively impacting the stock price, as it has been widely reliant on vehicle sales, even though Tesla has truly phased itself away from that being an important metric.
Tesla stands to gain greatly from the introduction of the Model Y L in the U.S., but only if Elon Musk sees it as a viable fit for the market. Families may need to see Tesla bring something larger to the U.S., or they might be forced to buy from another automaker that offers something that fits is needs for more interior space to haul around the kids.
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