TLDR
- Tesla reported strong Q3 deliveries as buyers rushed to use the $7,500 federal EV tax credit before its expiration
- Tesla stock dropped 5.1% despite beating delivery estimates, then recovered 1.6% the following day
- NYC Comptroller urged shareholders to reject Elon Musk’s pay package potentially worth $1 trillion
- Analysts expect Musk’s pay package will pass due to Tesla’s retail-heavy shareholder base holding 40% of shares
- Wedbush analyst Dan Ives predicts Tesla will shift toward AI-driven valuation over the next six to nine months
Tesla delivered a surprise win in Q3 with strong global delivery numbers. But the stock still fell 5.1% on Thursday before bouncing back 1.6% in early Friday trading to $442.96.
The delivery beat came as buyers rushed to claim the $7,500 federal EV tax credit before it expired. Congress phased out the incentive, creating a last-minute buying frenzy.
Other EV makers saw the same pattern. GM, Ford, and Rivian all posted strong sales results as customers moved up their purchase timelines.
Tesla stock has climbed 38% over the past three months. It’s up 75% over the past year and sits near all-time highs.
The delivery numbers were solid, but investors already priced in the good news. The stock had rallied about 40% in the month before the report dropped.
Pay Package Drama Heats Up
The New York City Comptroller threw a wrench into the works this week. The office sent a letter urging shareholders to vote against Elon Musk’s pay package.
The compensation plan could be worth $1 trillion if all performance targets are hit. Critics say it’s too much for any single CEO.
But analysts think the pay package will pass anyway. Wedbush analyst Dan Ives said there’s a better chance of him playing in the NFL this season than shareholders voting it down.
Tesla has a unique shareholder base. Retail investors own about 40% of available shares, roughly double the level of other big tech companies.
Those retail investors have backed Musk before. They’ve approved multiple pay packages over the years despite objections from proxy advisory firms.
Musk wants to control 25% of Tesla stock. He says this would prevent anyone from pushing him out, even though his board supports him.
What Happens After the Tax Credit?
The fourth quarter outlook is murkier now that the tax credit is gone. Canaccord analyst George Gianarikas called Q3 a “banger” but expects a sales decline in Q4.
He projects growth will return in 2026. But the company faces headwinds without government subsidies to sweeten deals for buyers.
Tesla trades at about 175 times estimated 2026 earnings. That’s a steep valuation by traditional car company standards.
Bulls argue Tesla isn’t a car company anymore. Ives believes the company will unlock AI-driven valuation over the next six to nine months.
Tesla plans to start producing the Cybercab autonomous vehicle next year. The robotaxi is central to the company’s pivot toward AI and robotics.
Ives expects the Trump administration to fast-track Tesla’s autonomous initiatives. He sees government support for AI development as crucial to competing with China.
Market technician Katie Stockton says investors should watch the 50-day moving average at $361. Falling below that level would signal changing sentiment.
Tesla’s stock could hit new all-time highs if momentum holds. The company delivered 462,890 vehicles in Q3, beating Wall Street estimates despite the challenging year.
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