Dear Tesla Shareholder [pdf]

Just want to re-iterate that car companies tend to be terrible investments with their cyclical nature, high fixed costs and high capital intensity.

The only reason you would invest in a company like Tesla at this price is because they have a CEO capable of 10x that is aggressively moving into other markets and not because you think they should become a docile car company and fix a few small things here and there.

I’m an investor because I want to see them go into semi’s and automation etc.

I used to have a lot invested in Tesla, but I sold all my shares 2 years ago. I just don't think that their valuation is justified at the current price. So it can crash and burn at any moment.

Tesla has been underperforming for a long time. If we look back to 2021, at that time Tesla had the best battery tech in the world (maybe not on the cell level, but definitely when looking at the system as a whole), the best-performing drivetrain, and generally OK cars.

Fast-forward 5 years, and Tesla's bread-and-butter Model 3 and Model Y are still using essentially the same battery tech. The range has not increased, and the cars themselves are barely any different with only some cosmetic updates. The infotaiment system is rapidly aging, and the cars lack advanced features like vehicle-to-grid.

The FSD has not materialized, and Tesla is likely on hook for billions in upgrades/refunds to pre-2019 car owners for the promised upgrades.

Other Tesla products are less than stellar. Tesla Semi has essentially disappeared, Cybertruck is barely selling (just around 4000 units in Q2!), Model 2 was canceled, and solar is essentially dead.

The battery storage is the only area that is growing robustly with a good profit margin. But Tesla doesn't have any moat there, and competitors (like BYD) are quickly catching up.

From what I can gather, the institutional shareholders that has signed this letter controls about 1-2% of the Tesla shares (roughly). Add the Norwegian Oil Fund to the mix, which will likely vote similarly and has roughly the same voting power, and we are up to 2-4%. That seems quite small.

I guess they publish this in advance in an effort to persuade other shareholders to vote similarly?

Genuine question as someone not from the US, who’s the average new Tesla owner these days?

Electric cars were seen as a leftist thing a few years back. If (again, as a non American) you asked me what the average car of a right wing American was, I’d say a ginormous pick up truck with a V8 ICE engine or something like that. Did that kind of person really start buying Teslas due to Musk’s close ties with the current US administration? I can’t see that. I also can’t see leftist American people buying Teslas due to environmental reasons alone despite of Musk either. So who’s buying those cars?

Purely anecdotical but I know at least one person who was going to buy a Tesla and he didn’t do it purely because of Musk. Also, the only time I got inside a Tesla was in a Cabify that took me to the airport (model 3), smooth ride but the interior was that of a cheap car from 10 years ago.

While I may only own a small part of Tesla, as a customer of their's, I want nothing more than the company to get rid of Elon and just become a normal, better car company. While they yell about driverless cabs and robots that can serve popcorn to you, none of the music apps have gapless playback. There's multiple stretches of 100+ miles of highway around me that have no supercharging capability, and dozens upon dozens of major population centers that need to travel 150+ miles to get to a service center. You can get the Model Y in any color you want, as long as the color you want is one of the five colors it's always been available in. These and more are all real problems that they could improve to be a better car company; but they're obsessed with constantly leapfrogging themselves and throwing away every customer they've ever won, because now they're an energy company, wait no, they're a robotics company...

I've stopped recommending Tesla to people, despite driving one. The company is way too unpredictable and unstable.

It’s nice to see karma at work

Coverage:

Elon Musk's $1T pay plan faces pushback from investors, state officials

https://www.reuters.com/business/autos-transportation/elon-m...

21st century, where a CEO of a major company doing Nazi salutes is not enough to fire him. How did we get here?

>the Board remains fixated on pleasing Mr. Musk

They state this as if it’s a problem, but it’s a fantastic thing for the company and the stock.

In the counterfactual world where the board did not do this and Musk left, Tesla would be way worse off. There’s also the theory that a new board could treat Musk badly or cut him loose and the company would do better, but I don’t buy that for a second. Put plainly, delusion runs rampant among Musk haters and that must be the reason this letter even exists. Or, some of them may be shorting and trying to avoid the day of reckoning.

And sure, his outspoken personality turns off a lot of people, but that is in the noise compared to the positive execution impacts he has.

This letter sounds like it's written by an activist, not an investor.

Ridiculous and biased article. Elon gets ZERO compensation if Tesla doesn't do stellar performance. Any tesla shareholder knows how Tesla is structured (Elon-focused) so just don't buy the stocks if you don't like Elon.

It also fails to completely mention Tesla stock's currently at an all time high.