Core Viewpoint - CEO Elon Musk is advocating for a $1 trillion pay package that will be voted on by shareholders in November, raising concerns about its legality and implications for corporate governance [1][16][17]. Group 1: Tesla's EV Business Performance - Tesla's Q3 deliveries were solid, but there are concerns about future growth in the EV business, especially in a post-EV tax credit environment [2][4]. - Current estimates suggest Tesla's sales potential is maxed out at around 1.9 million units per year, with projections for next year dropping to approximately 1.6 million cars [3][4]. - Analysts may not be accounting for the declining growth potential, as the company struggles to maintain demand without effective advertising [4][6]. Group 2: Product Affordability and Market Strategy - The introduction of more affordable models is viewed skeptically, as reducing the quality of the product to lower prices does not equate to true affordability [5][6]. - The strategy of diminishing product value to sell at lower prices is seen as a sign of weakness, indicating a disconnect between Tesla's needs and its current actions [6][7]. Group 3: Full Self-Driving (FSD) Technology - There are significant doubts about the viability of Tesla's full self-driving technology, with concerns that it will not be operational as promised [10][13]. - Comparisons are made with competitors like Waymo, which are perceived to be outperforming Tesla's FSD capabilities [12][13]. Group 4: Shareholder Governance and CEO Compensation - The upcoming vote on Musk's pay package is criticized as potentially the most absurd in business history, with concerns about its legality and lack of negotiation [16][17]. - There is skepticism about the board's willingness to challenge Musk, as they are seen as closely aligned with him, leading to poor shareholder governance [19][20].

Core Viewpoint - Tesla CEO Elon Musk criticized proxy advisory firms ISS and Glass Lewis, labeling them as "corporate terrorists" for recommending shareholders reject his proposed pay package, which could be valued at a trillion dollars. This statement followed Tesla's earnings call, where the company reported a 12% increase in third-quarter revenue but fell short of earnings expectations, leading to a 3.1% decline in stock price [2][4]. Financial Performance - Tesla reported a 12% increase in third-quarter revenue but missed earnings expectations due to a higher-than-expected tax rate. The earnings per share (EPS) decreased by 31% year-over-year, raising concerns about the company's future earnings growth trajectory [2][4][19]. - Despite the earnings miss, sales and margins exceeded expectations, indicating some operational strength [4]. Shareholder Dynamics - The upcoming annual meeting on November 6 is crucial, particularly regarding the vote on Musk's pay package. Historically, Tesla shareholders have aligned with the board's recommendations, as seen in the previous year's meeting where 72% voted to reinstate Musk's 2018 pay package [5][8][15]. - Analysts believe that the new trillion-dollar pay package will likely pass, although possibly with a lower percentage of support compared to previous votes [8][9]. Product Pipeline and Execution Risks - Tesla is facing challenges due to a lack of new product launches, with only one new vehicle model introduced since the Model Y in March 2020. The company has been criticized for the disappointing commercial performance of the Cyber Truck [17][18]. - The company plans to achieve volume production of the Cyber Cab, Semi, and Mega Pac 3 next year, but this creates significant execution risks as the pressure mounts on Musk and Tesla to deliver these products on time [17][19].

Group 1: Tesla's Challenges - Tesla's stock is under pressure due to CEO's focus on downsizing the U.S. government and facing multiple business headwinds [1] - The company is losing first-mover advantages and favorable consumer sentiment, with loyal customers not purchasing new cars as before [2] - Protests at Tesla sites and record vehicle trade-ins are negatively impacting the company's outlook [1][2] Group 2: Competitors Gaining Ground - BMW is emerging as a leading competitor, improving its EV fleet and expected to grow EV sales from less than 20% of revenue in 2024 to 50% by 2030 [2] - Toyota's hybrid RAV4 offers a combination of reduced emissions and increased range, appealing to dissatisfied Tesla owners [5] - Lucid Group is positioned to benefit from Tesla's decline, with its Air lineup offering luxury features and production of the Gravity model underway [9] Group 3: Analyst Sentiment - Analysts have a hold rating on BMW, but there is potential for a high-single-digit upside in stock price [3] - Lucid Group also holds a hold rating, but there are signs of improvement in analyst sentiment and institutional buying trends [10]