By james art A separate US appeals court ruled that Tesla CEO Elon Musk’s 2018 tweet stating that employees would lose stock options if they merged fell under free speech protections and should not be deleted. The New Orleans-based US 5th Circuit Court of Appeals overturned a 2021 National Labor Relations Board (NLRB) order that deemed the tweet an illegal threat. The court’s 9-8 decision emphasized that suppressing the speech of private citizens on matters of public interest has traditionally been frowned upon by American law.
The decision means the court did not consider whether Musk’s tweet violated the National Labor Relations Act. It also instructed the NLRB to reconsider its decision to reinstate the pro-union employee who had been fired. The dissenting justices, including all Democratic appointees to the court, criticized the decision as being “light on the law and the facts.”
This case, which preceded Musk’s acquisition of X (formerly Twitter) in 2022, arose during a union organizing campaign at the Tesla plant in Fremont, California. In the tweet, Musk suggested that employees have no problem voting for unions, but questioned the need to pay union dues while giving up stock options. Tesla said the tweet was not a threat, but a reflection of unionized workers at other auto companies not receiving stock options. Although a three-judge panel initially disagreed with that interpretation, the full appeals court decided to rehear the case.
On the other hand, Musk also shocked investors by predicting a 30 percent increase in vehicle sales next year, largely due to the introduction of a new, cheaper model and advances in self-driving technology. That optimistic outlook led to a significant jump in Tesla’s stock price, the biggest since the company reported its first quarterly profit in May 2013. However, analysts remain skeptical given current demand challenges and growing competition in the EV market.
Despite Musk’s ambitious sales target, many analysts are predicting more modest growth figures, with Deutsche Bank forecasting 12% growth and RBC predicting 13%. The global EV market is experiencing a slowdown, with the International Energy Agency predicting just 23% sales growth this year, less than previously expected. While Tesla aims to compete with rising Chinese brands like BYD, affordability challenges and potential political changes in the US pose significant obstacles.
As Tesla prepares to launch the long-awaited Cybertruck and continues to focus on its fully self-driving software, industry experts stress that delivering on growth promises will be critical to maintaining investor confidence. With production targets and new models on the horizon, stakeholders are closely monitoring Tesla’s performance in the rapidly evolving automotive environment.