Tesla’s Big Gamble on Musk
Tesla has placed a bold $1 trillion bet on Elon Musk, unveiling a pay package that ties his future to Tesla’s most ambitious goals. The plan, revealed Friday, could award Musk up to 423.7 million shares if the company reaches record-breaking milestones.
Those shares are worth nearly $149 billion at today’s prices. Yet if Tesla hits its lofty target valuation of $8.5 trillion, the payout skyrockets to almost $1 trillion. That would make Tesla twice as valuable as any company in history.
Why the Board Took This Step
Tesla’s board explained that Musk remains central to Tesla’s identity and long-term mission. They warned that without assurances, Musk might shift focus to his other ventures, including SpaceX, Starlink, and xAI.
Board chair Robyn Denholm stressed that Musk’s leadership qualities are “singular” and necessary to guide Tesla through its next era of innovation. However, the board also signaled frustration with Musk’s attention being divided across multiple companies and political pursuits.
Musk’s Push for Control
Musk has long argued that control of Tesla is vital. In January 2024, he stated he needed about 25% voting power to drive Tesla’s future in AI and robotics. With his current 13% stake, he fears being pushed out.
This package effectively offers him that control while keeping his focus anchored on Tesla. As analyst Gene Munster noted, the board’s message is simple: “We want your attention on Tesla.”
Ambitious Targets on the Horizon
The pay plan requires Tesla to achieve staggering results before Musk earns a single share. The first hurdle is a $2 trillion valuation—nearly double today’s market cap. The ultimate milestone sits at $8.5 trillion, alongside $400 billion in annual operating profits.
Supporters believe Tesla’s push into AI, robotaxis, and humanoid robots could unlock these numbers. Critics, however, point to Musk’s history of missed deadlines on self-driving technology.
The Debate Around Musk’s Value
Analyst Gordon Johnson argues Musk’s real talent lies in selling a vision that Wall Street buys, regardless of delays. Since 2014, Musk has promised fully autonomous cars “next year,” yet that future remains elusive. Still, the hype continues to keep Tesla’s stock elevated.
Even skeptics admit that many shareholders will likely approve the deal. After all, investors only benefit if Tesla’s value soars, making the upside hard to ignore.
The Bottom Line
Tesla’s trillion-dollar package highlights the tension between Musk’s ambition and his track record. It also underscores the board’s belief that without him, Tesla’s future would be far less certain.
Stay updated instantly — follow us on Instagram | Facebook | X | LinkedIn
