Quick overview

---

Tesla (TSLA) turned bullish on Wednesday because of rumors that the board is again considering how much to pay CEO Elon Musk. Tesla’s board established a special committee to investigate Musk’s compensation options, which may include stock options. Board member Kathleen Wilson-Thompson and chair Robyn Denholm comprise the special committee.

The committee will also look into “alternative ways” to pay Musk for previous labor if Tesla decides not to reinstate Musk’s 2018 compensation package, which is currently being appealed to the Delaware Supreme Court. In the last five trading sessions, Tesla shares have risen more than 20 percent,  up almost 4 percent in early trading today.

However, the electric car market faces future headwinds.

Tesla can’t halt the decline in demand, even with the Model Y’s relaunch and financial incentives. When these measures are applied to models viewed as less unique, Chinese consumers seem unresponsive.

Local competition, however, is developing rapidly. Major companies like BYD, SAIC, and Geely are expanding their product lines to offer a wider variety of sizes, software options, and price points. Tesla possesses a structural advantage that their ability to modify products, leverage regional tastes, and incorporate relevant innovations cannot counteract.

Volumes exported from Shanghai, typically destined for Southeast Asia or Europe, are also affected by this decline in interest. These exports are also slowing significantly.