Investor's Corner
Tesla is poised to survive 2020’s worst economic shocks; other automakers, not so much
Just before being proven wrong by Tesla’s first-quarter delivery and production numbers, TSLA bears were hard at work, spreading the now-aging narrative that the company’s electric cars will soon see a drop in demand. Hours before Tesla released its numbers, short-seller Jim Chanos even remarked that he remains “maximum short TSLA,” arguing that the company stands to lose money this year.
What the noted short-seller failed to mention was that this year would likely be downright brutal on the entire auto industry. 2020 only started, but the onset of the coronavirus pandemic has given the whole car market an economic shock that will resonate for a substantial period of time. Tesla will see adverse effects, most likely in the second quarter, but compared to the rest of the industry, the electric car maker may very well be poised to be a company that can not only survive, but thrive in these times of crisis. The same cannot be said for legacy carmakers, or the scheduled “Tesla Killers” that are set to be released in the near future.
Gene Munster of Loup Ventures noted that Tesla’s Q1 production and delivery results show that Tesla is winning despite the current headwinds simply because it has a product that is measurably better than both gas and electric competitors. The Wall Street veteran further added that while the next quarters will be challenging for Tesla and all other automakers like BMW and General Motors, he still expects Tesla to continue reporting 15-25% better delivery results compared to its peers.
A lot of this is due to the company’s products, specifically the Model 3 sedan and the Model Y crossover. Both vehicles are high-volume EVs, and they are designed to disrupt their respective segments. The Model Y, in particular, is designed to be competitive in the crossover market, which happens to be one of the fastest-growing segments in the auto industry today. Munster argued that over time, the price and performance gap between Tesla and its competitors would likely get broader. This is because rivals, such as legacy automakers and their respective EVs, will either have to sell a vehicle that’s at parity with Tesla’s features and range but at a higher price, or a car whose cost is subsidized by the company, resulting in financial strain. For automakers, such is a notable dilemma.
Tesla investor @Incentives101, an economist with a background in macro research, stated in a message to Teslarati that the demand for the electric car maker’s vehicles will largely depend on how distinct they are from other EVs on the market. It’s quite difficult to analyze a product’s demand from a consumer preferences standpoint. In the case of apparel, for example, it is challenging to determine why some consumers prefer Adidas over Nike. The auto industry is quite the same. When one looks at the demand for vehicles, it is difficult to pinpoint why some consumers buy a BMW 3-Series over an Audi A4, or a Mercedes-Benz C-Class; or why some customers buy a Honda Accord instead of a Toyota Camry.
Explaining further, the economist noted that instances such as these usually mean that the products consumers are purchasing are almost perfect substitutes for each other. If one were to study the size, efficiency, performance, and price of any category of cars, one would see that the differences are usually so marginal between each option and segment that consumer decisions often fall on subjective variables such as looks or brand loyalty. This is something that veteran automakers such as Ford rely on, with the company being proud of F-150 owners sticking with the company for years, or at times, even generations.
In the auto sector, there are various tradeoffs that customers are likely to compromise with. For buyers of cars with an internal combustion engine, opting for a low price will likely sacrifice performance, as is the case with the Toyota Camry. Buyers of electric vehicles from traditional automakers, on the other hand, will probably sacrifice something vital such as range for performance, as is the case with the Porsche Taycan. Tesla’s electric vehicles have pretty much eliminated these tradeoffs over time, largely thanks to the company’s own experience in producing and designing electric vehicles and their unique vertical integration, which provides the company unprecedented control over their products and the way they function.
Amidst the coronavirus pandemic, the health and economic shock that the world is facing are unprecedented. These shocks affect everyone, and for automakers, it will all come down to whoever can recover the fastest. Veteran automakers are fighting at a disadvantage as Tesla extends its gap in performance and tech. Tesla, on the other hand, may very well be poised to hit the ground running and crush its competitors in the process. The Model 3 and Tesla’s first-quarter results highlighted how demand for the company’s vehicles would likely be steady. As for demand concerns about Tesla, the economist noted that such concerns remain overblown.
“Until today, demand concerns about Tesla vehicles are overblown and based on a poor understanding of economics. Demand is a function of consumer preferences, basically what consumers value. It is also a function of income, price of substitutes, and few other things. How much each of these variables affects demand is not static. It may be that consumer preferences don’t change but income does, so in a scenario of rapid economic downturn with relatively fast recovery demand for Tesla would behave the same,” the economist wrote.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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.
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.
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.
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.
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:
Anecdotally, I’ve been getting more DMs from people ordering Teslas in the past few days than I have in the last couple of years. As expected, the end of the U.S. EV credit next month is driving a big surge in orders.
Lease prices are rising for the 3/Y, delivery wait times are… pic.twitter.com/Y6JN3w2Gmr
— Sawyer Merritt (@SawyerMerritt) August 13, 2025
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.
Elon Musk
Tesla bear Guggenheim sees nearly 50% drop off in stock price in new note
Tesla bear Guggenheim does not see any upside in Robotaxi.
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.
Elon Musk says Tesla will take Safety Drivers out of Robotaxi: here’s when
Tesla is already giving Robotaxi privileges hours after opening public app
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