Tesla’s Future Stability and Viability Questioned Ahead of 2024 Annual Stockholder Meeting

As Tesla prepares to hold its 2024 Annual Stockholder Meeting at its headquarters in Austin, Texas, questions arise regarding the impact of current events on the company’s future stability and viability. The meeting is expected to accommodate only a limited number of in-person attendees, and the anticipation surrounding it has already caused fluctuations in Tesla’s stock price.

Elon Musk, the controversial CEO of Tesla, has faced numerous challenges that have affected the company’s performance. From the unconventional pay package that rewards Musk based on Tesla’s market value rather than the quality or affordability of its cars, to ongoing lawsuits and accusations of insider trading, his leadership has been a subject of scrutiny. Major investors, including Norges Bank Investment Management and CalPERS, have expressed their concerns and announced their intention to vote against Musk’s pay package.

Another issue plaguing Tesla is the reduction in the expansion of its Supercharger network, which has been instrumental in overcoming the obstacles of limited electric vehicle (EV) range and charging options. The company’s reliance on the Supercharger network has made it one of the largest customers for utilities in the country, and the federal government has provided $5 billion in funding for new chargers. However, the reduction in the Supercharger workforce raises questions about the status of this federal endowment.

Tesla’s influence on the used EV market is also significant, with its pricing strategies impacting other automakers. While the average transaction price for new EVs has decreased, Tesla has seen larger-than-average increases in its average transaction price. This has led to a decline in the cost of used electric vehicles, affecting the overall market. Additionally, Tesla’s preliminary data suggests that its Model 3 and Y have shown minimal degradation after high mileage, further enhancing the company’s position in the EV market.

Despite these challenges, Tesla is making strides in green energy and artificial intelligence. Investment firm ARK predicts a bright future for Tesla, estimating an expected value of $2,600 per share in 2029. The firm believes that Tesla’s enterprise value and earnings will be primarily attributed to its robotaxi business, which it expects to launch within the next two years. However, JPMorgan remains cautious, stating that material revenue generation from the robotaxi business may take years to materialize.