Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Tesla is poised to report its third-quarter earnings after the market closes on Wednesday, with investors keenly anticipating updates on the teased Cybercab product and the company’s broader robotaxi strategy. However, CEO Elon Musk’s immediate focus appears to be on securing approval for his proposed compensation package, which has drawn opposition from proxy advisors ahead of the November 6 shareholder meeting.
Third-Quarter Earnings Preview
Analysts project Tesla’s third-quarter earnings per share to decline 24% year-over-year to 55 cents, compared to 72 cents in the same quarter last year, according to FactSet consensus. Revenue is expected to see a modest increase of approximately 4.6%, reaching an estimated $26.33 billion.
Beyond the headline financial figures, investor and analyst attention during the earnings call will likely center on Musk’s projections for robotaxi scaling and the advancement of autonomous driving technology. A significant point of interest is the Cybercab, which Tesla announced would begin production in 2026.
The Cybercab, unveiled in 2024 as a fully autonomous two-seater “robotaxi” lacking a steering wheel, brake, or gas pedal, has been observed testing at Tesla’s Fremont and Texas facilities. These sightings, some showing manual operation, have led to speculation about potential dual-mode release. Reports from China also suggest Tesla might be revisiting a “low-cost” vehicle project, previously shelved in favor of robotaxi development.
The Cybercab is expected to utilize an “unboxed” manufacturing process. Investors are looking for confirmation of progress on this new system and its potential for cost savings, though Musk has historically refrained from using earnings calls for product launches.
Musk’s Compensation Package Under Scrutiny
A significant point of contention leading into the shareholder meeting is a proposed pay package for Elon Musk, valued at nearly $1 trillion over the next decade, contingent on the company meeting a series of ambitious performance targets. Tesla and Musk have actively promoted the proposal on social media and through paid advertisements.
However, major proxy advisory firms have recommended against the deal. Institutional Shareholder Services (ISS) advised investors to vote no, a recommendation Tesla’s X account labeled “unfounded and nonsensical.” Fellow advisor Glass Lewis also opposed the package, drawing similar criticism from Tesla.
Musk himself addressed the criticism, stating on X, “Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won’t be Me,” in response to concerns about CEO overpayment. The proposed compensation is tied to milestones including 20 million Tesla vehicles delivered, 10 million active full self-driving subscriptions, 1 million Optimus robots delivered, and 1 million robotaxis in commercial operation, alongside substantial market capitalization growth.
Investors are scheduled to vote on this pay package, along with other measures including investment in Musk’s xAI company, during the annual shareholder meeting on November 6.
Tesla Stock Movement
Tesla stock (TSLA) saw a 2% rise on Monday, trading around $447.60, moving above an aggressive early entry point. Over the past week, shares climbed 6.2% to $439.31, reclaiming the 21-day exponential moving average on October 13.
The stock currently exhibits a deep handle with a 470.75 buy point on a deep base. While the handle has experienced significant, high-volume declines, it is showing signs of tightening. Aggressive investors might consider Friday’s high of 441.46 as an early entry, although market volatility and the impending earnings report elevate the associated risks.
TSLA holds a Composite Rating of 78 out of a possible 99, a Relative Strength Rating of 91, and an EPS Rating of 54.
Outlook
As Tesla approaches its third-quarter earnings report, the company faces a dual focus: delivering on its financial performance and future product innovations like the Cybercab, while also navigating a contentious debate over CEO Elon Musk’s proposed compensation package. The outcomes of both the earnings call and the upcoming shareholder vote are poised to significantly influence investor sentiment and the company’s trajectory.
