Tesla Proposes a Trillion-Dollar Bet That It's More Than Just Cars

For a while now, Tesla CEO Elon Musk has seemed awfully distracted.

His past few years in non-Tesla activities include: buying and renaming Twitter; going all in on President Donald Trump’s election campaign and then an obscure Wisconsin Supreme Court race; a lot of babymaking, plus attendant drama; and months spent standing up the so-called Department of Government Efficiency. Meanwhile, Tesla sales have slid as the electric-car maker faces fierce competition from Chinese manufacturers and rejection from buyers turned off by his politics.

Now a new and unprecedentedly gigantic $1 trillion pay package proposal from the Tesla board will attempt to recenter Musk’s focus on the automaker. Maybe “automaker” is the wrong term: For years now, Musk has argued that Tesla should be valued as an autonomous vehicle and robotics firm. He has said that the earning potential of those products—their potential to change the global economy—would justify eye-wateringly high numbers. “Extreme execution is needed, but a valuation of $20 trillion for Tesla is possible,” he posted in July. That’s five times the value of the current market-cap leader, Nvidia.

The goals set out in the proposed pay package, which will have to be approved by shareholders in November, would force Musk to spend the next decade turning that big talk about robots and robotaxis into actual execution. In turn, Musk could become the world’s first trillionaire.

The proposal, posted as a filing to the SEC, sets out four major product-related operational goals and eight goals related to Tesla’s financial performance. In order to make the full $1 trillion, Musk would have to usher Tesla to an $8.5 trillion valuation—more than eight times its worth today and more than double the value of Nvidia.

The goals, to be met within the next 10 years, include:

• 20 million vehicles delivered
• 10 million active Full-Self Driving subscriptions
• 1 million robotaxis in commercial operation
• 1 million robots delivered
• $400 billion in adjusted EBITDA
• An $8.5 trillion valuation

Musk would receive progressively higher pay based on how close he can get to these financial goals.

The targets are lofty and could prove especially challenging for Musk, who has missed plenty of his own product timelines by months, if not years, even as he led Tesla to its current status as the world's most valuable carmaker. Tesla has delivered 8 million vehicles since its founding in 2008, and global deliveries have slid more than 10 percent over its past two quarters.

The company doesn’t release Full Self-Driving (Supervised) subscription numbers—customers have to pay to unlock the advanced driver-assistance software—but Musk said on a recent earnings call that while subscription rates are up, “like half” of Tesla owners haven’t even tried the feature, which is often offered on a trial basis. In the US, safety regulators have opened several probes into the tech, which performs many driving tasks on its own but, because it’s not entirely reliable, requires drivers to pay attention to the road at all times.

Tesla launched a limited robotaxi service in Austin, Texas, earlier this summer, but it's unclear whether the vehicles driving around the city are technologically advanced enough to count toward that 1 million robotaxi goal. (The proposal specifies that the robotaxis must not have a “human driver,” and the vehicles in Texas have safety monitors sitting in their front passenger seats for city rides and in the driver’s seats for highway trips.)

Meanwhile, the company is reportedly falling well short of its goal to produce 5,000 units of Optimus, its humanoid robot, by the end of this year, having produced only a few hundred. Musk has said that Optimus could one day revolutionize the global economy by replacing the majority of human labor, but The Information reported in July that the Optimus team was having particular trouble with the robot’s hands. The company’s vice president of Optimus robotics, a nine-year Tesla veteran, left in June.

“For Musk to receive the full pay package, Tesla will need to be the leader of autonomous vehicles and humanoid robots in a number of countries,” says Seth Goldstein, a senior equity analyst at Morningstar, a financial services firm.

Musk’s past pay packages have been unconventional and controversial. Unlike other CEOs, Musk does not receive annual compensation or incentives but is instead paid according to Tesla’s long-term performance. His 2018 pay package, worth more than $50 billion, is still in legal limbo after a shareholder lawsuit accusing the Tesla board of insufficient transparency and independence led to a Delaware judge striking it down last year. (Tesla responded by reincorporating in Texas.) The board granted Musk an interim $29 billion stock award last month.

The proposal demonstrates that, despite Musk’s controversial moves, Tesla’s board sees him as a crucial part of the automaker’s success and that the Musk era is far from over. “This new pay package should keep Elon Musk at Tesla for at least the next decade,” says Goldstein.

The package’s goals double down on the messages of Tesla’s “Master Plan Part IV,” a lofty mission statement posted this week exclusively on X, Musk’s social platform. Tesla’s Master Plans were once cheeky blogs posted directly by Musk onto Tesla’s website, complete with back-of-the-envelope energy cost calculations. The new plan points to Tesla’s more civilizational ambitions. “Autonomy must benefit all of humanity,” one section reads; “Greater access drives greater growth,” reads another, complete with renderings of Optimus robots serving cocktails and watering plants.

But if Musk wants to change the world and make his trillion, he’ll have to stay in his lane—and out of President Donald Trump’s, for whom he once served as “First Buddy”. The board-run committee that put together the pay proposal has met with Musk 10 times since February, the Tesla board wrote in its filing. Among other things, the filing reads, the committee received “assurances that Musk’s involvement with the political sphere would wind down in a timely manner.”