Investor's Corner
Tesla selects Oracle founder as new board member in “home run” appointment
Tesla shares (NASDAQ:TSLA) are up on Friday amidst the company’s appointment of Oracle Corp. founder Larry Ellison and Walgreens Boots Alliance’s Global Chief Human Resources Officer Kathleen Wilson-Thompson as the newest members of its board of directors. Wall Street appears to have responded well to Tesla’s selection, with analysts dubbing it as a “home run” and as a “strong step forward” for Elon Musk and Tesla.
In a note on Friday, Wedbush analyst Daniel Ives, who has an “Outperform” rating and a $440 price target on TSLA stock, described Ellison as a “home run appointment” for the electric carmaker. The Wall Street analyst also noted that Wilson-Thompson, with her extensive experience in human resources, is a “second impressive” independent director. Ives further remarked that the new appointments would likely help Tesla navigate through challenges in the coming years.
“Given Ellison’s stature in tech circles, strong reputation in the Valley and on the Street, and vast accomplishments at Oracle among other achievements over the past 40 years, the addition of Mr. Ellison on the board, in our opinion, is another key step forward for Tesla and Musk as the company starts to build an independent and well-regarded board that can help the company navigate through transformational opportunities in the electric vehicle market over the coming years with competition and production complexity a key factor that needs to be handled without a major speed bump,” the analyst wrote.
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- Larry Ellison (Photo: Tesla)
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- Kathleen-Wilson-Thompson (Photo: Tesla)
Tesla’s two new board members, Oracle Corp. founder Larry Ellison and Walgreens Boots Alliance’s Global Chief Human Resources Officer Kathleen Wilson-Thompson. (Photos: Tesla)
Loup Ventures Managing Partner Gene Munster is also optimistic about Tesla’s new members of the board. In a post on the financial firm’s website, Munster stated that the new appointments are a “strong step forward” for the electric car maker. The executive added that Ellison, in particular, would boost Tesla, since he could be considered “a rare peer to Elon Musk,” in the way that he built Oracle — one of the world’s largest and most prolific tech companies today — from the ground up.
“In many ways, Larry was “Elon” before Elon was Elon. Or maybe Elon is the new Larry — the boldest of tech entrepreneurs. Either way, we see Ellison as someone that may be able to influence Musk when he veers into unhelpful or unhealthy territory,” Munster wrote.
Tesla critics would be quick to point out that Musk and Ellison are portrayed as friends. That said, Munster expects Ellison’s personal friendship with Musk to not get in the way of his professional responsibilities at Tesla. The Oracle founder, after all, previously served on the board of Apple from 1997-2002, where he worked with Steve Jobs, one of his closest friends.
While Ellison’s addition to Tesla’s board of directors is worthy of headlines on its own, Munster noted that Kathleen Wilson-Thompson also brings a particularly important skill set to the electric car maker’s top executives. Wilson-Thompson has extensive experience in HR, which would likely come in handy considering that Tesla is facing some degree of talent drain, partly due to Musk’s style and his behavior. The Loup Ventures managing partner stated that ultimately, Wilson-Thompson’s presence in the board could very well be “influential in helping the company add new talent, which will be critical in building a sustainable organization.”
In a blog post, Tesla’s board of directors have expressed their support for the appointment of the two new members.
“In conducting a widespread search over the last few months, we sought to add independent directors with skills that would complement the current board’s experience. In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy,” the board wrote.
The addition of Ellison and Wilson-Thompson stands as part of Elon Musk’s settlement with the Securities and Exchange Commission, which filed a lawsuit against the CEO over his now-infamous tweet last August, where he stated that he was considering taking Tesla private at $420 per share and that he had “funding secured.” Under the settlement’s terms, Musk was required to step down as the Chairman of the Board. Tesla was also required to appoint two new independent board members, on top of a $40 million fine. Back in November, Tesla appointed a new Chair to the board, in the form of longtime board member Robyn Denholm, who has experience in both the tech and the finance industry.
As of writing, Tesla shares are trading +4.45% at $330.19 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla is ‘better-positioned’ as a company and as a stock as tariff situation escalates
Tesla is “better-positioned” as a company and as a stock as the tariff situation between the United States, Mexico, and Canada continues to escalate as President Donald Trump announced sanctions against those countries.
Analysts at Piper Sandler are unconcerned regarding Tesla’s position as a high-level stock holding as the tariff drama continues to unfold. This is mostly due to its reputation as a vehicle manufacturer in the domestic market, especially as it holds a distinct advantage of having some of the most American-made vehicles in the country.
Analysts at the firm, led by Alexander Potter, said Tesla is “one of the most defensive stocks” in the automotive sector as the tariff situation continues.
The defensive play comes from the nature of the stock, which should not be too impacted from a U.S. standpoint because of its focus on building vehicles and sourcing parts from manufacturers and companies based in the United States. Tesla has held the distinct title of having several of the most American-made cars, based on annual studies from Cars.com.
Its most recent study, released in June 2024, showed that the Model Y, Model S, and Model X are three of the top ten vehicles with the most U.S.-based manufacturing.
Tesla captures three spots in Cars.com’s American-Made Index, only U.S. manufacturer in list
The year prior, Tesla swept the top four spots of the study.
Piper Sandler analysts highlighted this point in a new note on Monday morning amidst increasing tension between the U.S. and Canada, as Mexico has already started to work with the Trump Administration on a solution:
“Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars.”
However, with that being said, there is certainly the potential for things to get tougher. The analysts believe that Tesla, while potentially impacted, will be in a better position than most companies because of their domestic position:
“If nothing changes in the next few days, tariffs will almost certainly deal a crippling blow to automotive supply chains in North America. [There is a possibility that] Trump capitulates in some way (perhaps he’ll delay implementation, in an effort to save face).”
There is no evidence that Tesla will be completely bulletproof when it comes to these potential impacts. However, it is definitely better insulated than other companies.
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Tesla (NASDAQ: TSLA) received a price target boost from analysts at Truist Securities, but it came with some criticisms based on a lack of information on several things that investors were excited to hear about regarding future vehicles and AI achievements.
Last night, Tesla reported its earnings from the fourth quarter of 2024, and while it had a very tempered financial showing, missing most of the Wall Street targets that were set for it, the stock was up after hours and on Thursday due to the details the company released regarding its plans for 2025.
CEO Elon Musk stunned listeners last night by revealing plans to launch unsupervised Full Self-Driving as a service in Austin in June 2025. It will be the first time Tesla will offer driverless FSD rides in public, something it has been working with the City of Austin on since December.
Tesla to launch unsupervised Full Self-Driving as a service in Austin in June
It also reiterated plans for affordable models to be launched this year, potentially catalyzing annual growth in deliveries, something it said it expects to resume in 2025.
Tesla was flat on deliveries in 2024 compared to 2023.
The positives during the call were enough for Truist Securities analyst William Stein to raise the company’s price target to $373 from $351. However, Stein’s note to investors showed there was something to be desired despite all the good that was revealed during the call:
Stein said there was “not enough ground-truth” during the call and too much of a focus on “cheerleading” the company’s potential releases this year:
“Too much cheerleading; not enough ground-truth. In Q4, TSLA’s ASP weakness drive revenue, GPM, OPM, & EPS below consensus.”
As previously mentioned, Tesla did report weak financials that missed consensus estimates. What saved the call and perhaps the stock from plummeting on these missed metrics was the other details that Musk revealed, especially the FSD launch in Austin in June.
There were also plenty of things related to the affordable models and other vehicles, like the fact that Tesla plans to include things like Steer by Wire, Adaptive Air Suspension, and Rear Wheel Steering, that helped offset negatives.
Stein saw this as a distraction from what should have been reported:
“While CEO Elon Musk played the role of cheerleader, calling for TSLA’s path to massive market cap by leading in autonomy, management was remarkably short on two critical details: (1) info about new vehicles in 2025 and (2) milestones for AI acheivements, especially FSD. We continue to ask ourselves ‘where’s the beef?’ CY26 EPS to $3.99 (from $4.87). DCF-derived PT to $373 (from $351).”
Tesla did detail some AI milestones, like its record-breaking miles per accident on Autopilot, which was a Q4-best of 5.94 million miles. The Shareholder Deck also outlined major upgrades to AI:
“In Q4, we completed the deployment of Cortex, a ~50k H100 training cluster at Gigafactory Texas. Cortex helped enable V13 of FSD (Supervised)1, which boasts major improvements in safety and comfort thanks to 4.2x increase in data, higher resolution video inputs, 2x reduction in photon-to-control latency and redesigned controller, among other enhancements.”
Tesla shares are up 2.11 percent on Thursday as of 12:05 p.m. on the East Coast.
Need accessories for your Tesla? Check out the Teslarati Marketplace:
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- https://shop.teslarati.com/collections/tesla-model-y-accessories
- https://shop.teslarati.com/collections/tesla-model-3-accessories
Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla has released its Q4 2024 vehicle safety report. Similar to data from previous quarters, vehicles that were operating with Autopilot technology proved notably safer.
The Q4 2024 report:
- As per Tesla, it recorded one crash for every 5.94 million miles driven in which drivers were using Autopilot technology.
- The company also recorded one crash for every 1.08 million miles driven for drivers who were not using Autopilot technology.
- For comparison, the most recent data available from the NHTSA and FHWA (from 2023) showed that there was one automobile crash every 702,000 miles in the United States.
Previous safety reports:
- In Q3 2024, Tesla recorded one crash for every 7.08 million miles driven in which drivers were using Autopilot technology and one crash for every 1.29 million miles driven by drivers not using Autopilot technology.
- In Q2 2024, Tesla recorded one crash for every 6.88 million miles driven in which drivers were using Autopilot technology, and one crash for every 1.45 million miles driven for drivers not using Autopilot technology.
- In Q1 2024, Tesla recorded one crash for every 7.63 million miles driven in which drivers were using Autopilot technology, and one crash for every 955,000 million miles driven for drivers not using Autopilot technology.
Year-over-Year Comparison:
- In Q4 2023, Tesla recorded one crash for every 5.39 million miles driven in which drivers were using Autopilot technology and one crash for every 1.00 million miles driven for drivers not using Autopilot technology.
Key background:
- Tesla began voluntarily releasing quarterly safety reports in October 2018 to provide critical safety information about our vehicles to the public.
- On July 2019, Tesla started voluntarily releasing annual updated data about vehicle fires as well.
- It should be noted that accident rates among all vehicles on the road can vary from quarter to quarter and can be affected by seasonality, such as reduced daylight and inclement weather conditions.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
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