Australian politicians join the unhappy queue behind Tesla investors

If Musk is flippant again and there is no adult in the room on this week’s conference call, with no convincing answers, then darker days are ahead, says Ives.

Closer to home and unrelated to Tesla, the Musk response to authority was on clear display at the weekend as both sides of politics blasted his social media platform X for refusing to take down video of last week’s church stabbing.

The self-branded free speech absolutist’s mocking of Australia included likening our eSafety commissioner, Julie Inman Grant, to a “censorship commissar” – eliciting rare united fury from the federal government and opposition.

Indeed, one of many concerns voiced by Tesla shareholders is the distraction posed by ownership of X (formerly Twitter.)

There is also a sense of unease about Musk’s remuneration. Tesla shareholders will vote on June 13 on restoring Musk’s performance-based stock options award, struck down in January by a Delaware judge.

All these issues are in the mix, but the overwhelming question that requires an answer is how Tesla will respond to the difficult EV market conditions.

It is being hammered by increased competition coming out of China and has continued to respond by cutting prices. Tesla slashed prices of three of its five models in the US late on Friday, then cut prices around the globe – including in China and Germany.

This followed last week’s move to cut 14,000 staff – the equivalent of 10 per cent of its workforce.

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Ives has outlined key issues that Musk, who cancelled a recent trip to India, must address at this week’s investor conference.

He says Musk must tell investors how Tesla will reverse the negative growth trend in China and its pricing strategy in that key market, which has gone from a tailwind to a major headwind in the Tesla story, amid rising competition.

He believes investors need to be given realistic goals for 2024 for growth, free cash flow, and margins. “Do NOT let [Wall] Street keep this guessing game, as uncertainty is adding to the overhang in the story,” says Ives.

Tesla’s stock price has fallen more than 40 per cent this year, yet it still trades on a price-to-earnings multiple of a growth stock.

For this to continue, Musk must convince investors that earnings will grow and that Tesla is more than just another vehicle manufacturer.

It is time to bring out some Musk magic.