Tesla Shareholders Want a Stock Buyback After Years of Gains Are Wiped Out

Tesla's model lineup with The Morning Shift banner.
Tesla's model lineup with The Morning Shift banner.

Tesla investors want Elon Musk to do something about the company’s quickly dipping stock prices, President Joe Biden is “directly” involved with negotiations to avoid a railroad strike, and Nissan is looking to ease customers and dealers into the EV future. All that and more in The Morning Shift for Wednesday, November 23, 2022.

1st Gear: Tesla Shareholders Plead for a Buyback

Tesla’s shares have more than tripled within one year, but recently those gains have been virtually wiped out. It looks like a hell of a lot of the damage has come from CEO Elon Musk’s handling of his Twitter acquisition.

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The downturn has caused a number of shareholders to ask for a stock buyback from the company. From Bloomberg:

On Monday, after Tesla slumped to a two-year low, more than 8,600 users of the platform that’s been preoccupying Musk for weeks tuned into a Twitter Spaces conversation that the host titled “$TSLA Bagholder Therapy.” Many have complained about the CEO dumping his stock and are asking for a share buyback.

“This is up to the Tesla board,” Musk responded to one such request last week. He said during an earnings call last month that the board generally thought a buyback made sense and that something on the order of $5 billion to $10 billion was possible.

Authorizing a buyback would be a show of confidence on the part of Tesla’s board that the stock is undervalued. Musk, who’s not been shy in the past about talking down the share price, was wildly bullish about its potential during the latest earnings call, saying he saw potential for Tesla to be worth more than Apple and Saudi Aramco combined. He undercut those comments three weeks later by selling another $3.95 billion batch of his stock, bringing the total he’d disposed of in the past year to about $36 billion.

The Tesla issue, along with Musk saying demand was “a little harder” to come by across the globe has led to issues with the stock price.

Bloomberg says if the company does end up doing its first-ever share buyback, it will run directly in the face of what it has told investors in the past about returning some money to those shareholders. It had previously said it intends to keep all future earnings in order to finance future growth.

2nd Gear: Biden Getting ‘Directly’ Involved in Railroad Strike

President Joe Biden is ‘directly’ involved in negotiations to avert the a railroad strike that would absolutely decimate the supply chain, the White House has reportedly said.

According to Reuters, Biden has called the potential railroad shutdown “unacceptable.” White House Press Secretary Karine Jean-Pierre added that it would be ideal for all parties to resolve the issue themselves.

Right now, the full extent of Biden’s involvement isn’t exactly known, but Jean-Pierre says he is directly in the mix.

Godspeed, Joe. Godspeed.

3rd Gear: Nissan Wants to Ease Everyone in EVs

Nissan is looking to make the adoption of EVs smoother for everyone involved through a new program it has just unveiled. EV Carefree+ is going to offer Ariya buyers a battery warranty and a year of free access to EVgo fast chargers around the country. That’s good for the customers.

What’s good for both customers and dealers is the three years and 36,000 miles of scheduled maintenance that covers tire rotations as well as air filter and fluid replacements. That should help dealers get past the fact that EVs require less maintenance than internal combustion cars do. From Automotive News:

In past years, service revenues from Nissan’s electric Leaf hatchback have been half that of the brand’s combustion engine vehicles, said Nissan National Dealer Advisory Board Chairman Tyler Slade.

The negative effect of EVs on dealer fixed ops business will be compounded over the next few years as Nissan prepares to introduce several high-volume electric sedans and crossovers. By 2030, the Japanese automaker expects EVs to account for 40 percent of its U.S. sales.

“The EV business is a significant concern for the franchised dealer’s service and parts business going forward,” Slade told Automotive News.

EV Carefree+ could soften the impact of EVs on retailers’ bottom line by boosting customer retention rates and creating new revenue-making opportunities.

Aditya Jairaj, Nissan North America senior director of EV strategy and transformation, said the complimentary service will reassure owners their EV is well maintained while creating “customer touch points” for dealers.

It keeps the customer in the dealer franchise system and improves satisfaction and loyalty rates, Jairaj said.

The new program also aims to generate more business than just service at Nissan’s 1,078 dealers across the country.

Slade says that people who get their vehicles serviced at dealers are 30 percent more likely to buy another car from the same location.

“When they come in for maintenance, it creates an opportunity to show new models and technologies and trade them out of their current EV into a newer, nicer EV,” he said.

4th Gear: Elon Musk Eyeing South Korea For EV Investment

Tesla CEO and Twitter guy Elon Musk said South Korea is a top candidate for a new factory location as the company plans to build in Asia, according to South Korea’s presidential office.

Musk reportedly made the remark in a call with President Yoon Suk-yeol. He added that Tesla was planning to step up cooperation with supply chains in South Korea. From Reuters:

As Yoon was aware of Tesla’s plans to build a factory in Asia in the future, his office said, Yoon asked Musk to build the factory in South Korea.

In response, Musk said he considered South Korea to be one of the top candidates and would make the decision after reviewing investment conditions in other countries, including labour quality, technology level and production infrastructure.

Tesla was not immediately available for comment outside U.S. business hours when contacted by Reuters.

“We expect to buy components worth more than $10 billion from South Korean firms in 2023 as we significantly expand supply chain cooperation with South Korean companies,” Yoon’s office quoted Musk as saying.

The contact between Yoon and Musk comes ahead of a criminal trial about to begin in South Korea that hangs on questions about the safety of Tesla cars, at a time when the EV maker faces a range of lawsuits and increased scrutiny by regulators.

Yoon said in the discussion he would reform unreasonable regulations that hindered investment by global tech companies, according to Yoon’s office. The president added that the government would continue its effort to attract investment from high-tech companies to enhance the country’s competitiveness.

Along with South Korea, Indonesia and India, among others, have been lobbying to be home to Tesla’s next Asian investment.

5th Gear: Stellantis Gets Creative With Car Storage

Stellantis is reportedly using an abandoned airfield in eastern France to store cars that are ready to be delivered to customers but cannot be shipped or kept at its factory in Sochaux because of a number of logistical issues.

There’s a lack of truck drivers and a shortage of truck and train capacity that has hampered deliveries for European carmakers. It stemmed from two things that you probably could have guessed: the pandemic and the war in Ukraine. From Reuters:

With several thousands of cars waiting to be sent from Sochaux, which produces bestsellers Peugeot 3008 and 5008, Stellantis has turned to an unusual solution by using a former military airfield at Lure-Malbouhans, some 40 kilometres (25 miles) away, to store them temporarily, the sources said.

“This disused airfield is now steadily used for storage of cars produced in Sochaux,” one of the sources said.

A spokesperson for the manufacturer said it was “securing additional spaces and surfaces for the storage of cars” but declined to details.

Another source within the union that builds the cars says Stellantis produces right around 1,100 cars per day, but can only ship about 800 of them. It’s easy to see how quickly this issue can snowball.

Reverse: Billy Joel Will Get a Song Idea

Legendary outlaw Billy the Kid is born

Neutral: Don’t Drink and Drive

It’s the night before Thanksgiving. I know you’re probably off to see friends this evening. Don’t ruin lives because you were dumb enough to drink and drive. See you all next week.

On the Radio: A Charlie Brown Thanksgiving


A Charlie Brown Thanksgiving

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