Elon Musk’s pay package explained and Tesla’s $8.5 trillion goal

New pay plan for Musk is proposed

Tesla’s board has proposed a performance-based stock award for Elon Musk that could be worth about $1 trillion if Tesla hits ambitious targets, including lifting its market value to roughly $8.5 trillion.

This new plan is huge, potentially making him the world’s first trillionaire. The plan will keep him working hard for Tesla and ensure he leads the company toward its ambitious future goals.

The new pay package, which shareholders will vote on in November 2025, has been proposed after his previous pay deal was blocked in court. The new package is a way to try to fix the issues raised by a judge.

Old pay plan was rejected by a court

Elon Musk’s first big pay package from 2018 was recently rejected by a court in Delaware, a state in the U.S. A judge decided that how the board approved the deal was unfair to other investors. The judge called the amount of money “unfathomable.”

Even though most shareholders voted again in June 2024 to approve the original deal, the judge still upheld her decision to strike it down in December 2024. This ruling has created a legal battle and led to the new proposal.

A new goal of $8.5 trillion

The new pay package for Musk is connected to a very ambitious goal for Tesla’s value. The company wants to grow its value from about $1 trillion today to an unbelievable $8.5 trillion in the next 10 years.

This would make Tesla the most valuable company in the world. Musk must help the company reach this goal of getting full pay. This means that Tesla needs to grow its value by more than eight times its current value. This goal is so big that it relies on more than just selling cars.

Robots are key to the $8.5 trillion goal

To reach the $8.5 trillion value, Tesla is betting on new products. The company believes its humanoid robot, Optimus, will be a considerable part of its future. According to a Reuters analysis, to hit a $400 billion annual profit target in the pay plan, Tesla would need to sell around 100 million robots each year.

The company believes these robots could perform tasks that people do now. If this business succeeds as hoped, it could eventually make up a big part of Tesla’s total value, perhaps even as much as 80% as Musk has said.

Robotaxis will drive a lot of value

Another big part of the plan is to create an extensive network of self-driving cars called robotaxis. These cars would not need a driver and could earn money for the company by giving rides.

This could create a very profitable business. One company, ARK Invest, believes the robotaxi business could bring in anywhere from $603 billion to $951 billion in annual revenue by 2029. This is a lot more money than other ride-sharing companies make today.

Tesla is now a technology company

Tesla’s new plans show that it wants to be seen as more than just a car company. It wants to be known as a leader in artificial intelligence (AI) and robotics. The new pay package has milestones that are not just about car sales.

The new goals include delivering 20 million vehicles in total, getting 10 million active subscriptions for its self-driving software, and having 1 million robotaxis and 1 million Optimus robots in operation.

Skeptics see a huge risk

Not everyone believes Tesla can reach its $8.5 trillion goal. Many experts think the plans for robots and robotaxis are too optimistic. They point out that competition is growing in these new markets and many challenges are ahead.

The current market value of Tesla is still built on a lot of hope for future growth, not just on the cars it sells now. The considerable gap between its current value and the $8.5 trillion goal shows how big a leap of faith is needed from investors.

The goal is based on faith

The company’s goals are part of a bigger long-term plan called “Master Plan Part 4.” This plan is all about creating what Musk calls “sustainable abundance,” where robots and AI handle most of the work.

Musk has publicly stated he wants a stake of around 25% in the company. He has argued that he needs this level of control to make Tesla a leader in AI and robotics, and that if he doesn’t have it, he might work on these projects somewhere else.

Recent self-driving progress

In recent years, Tesla has focused on improving its self-driving technology. The company has a service it calls Full Self-Driving (Supervised). This system is constantly learning from the massive amount of data collected by the cameras on its cars.

The system is trained on what the company says is over 100 years of real-world driving data collected every 10 minutes from its fleet of over six million cars. This considerable effort is a key part of the path to making a true robotaxi a reality

The Optimus robot appears

The Optimus humanoid robot was first shown to the public in 2021. The first prototypes were made to show that Tesla was serious about moving into the robotics field.

This significantly changed the company’s focus, moving beyond just vehicles. Optimus is being designed to do tedious or complex tasks. The company has a goal to produce thousands of these robots in 2025. Over time, the plan is to make hundreds of thousands each year.

The difficult launch of the Model 3

Before focusing on robots and robotaxis, Tesla’s main job was to build many electric cars. The Model 3 was the first car made for many people. Building this car in 2017 was hard, and Musk called it “production hell.”

The company faced big problems getting enough cars built to meet the high demand. However, after solving these problems, Model 3 became a huge success. It was a key step that helped the company get big.

Building the Gigafactories

To make enough cars and batteries, Tesla had to build its huge factories, Gigafactories. The first one was built in Nevada starting in 2014. These factories were designed to make everything on an immense scale.

These factories were a significant step in the company’s history. They helped Tesla lower the costs of its batteries and cars. This made it possible to build more affordable electric cars for people.

Early Autopilot and FSD software

The idea of self-driving cars has been part of Tesla’s plans for a long time. The company’s Autopilot system was first released in 2014. The system allowed cars to do some driving tasks, like staying in a lane and controlling their speed.

At the time, this was a very new and advanced feature. The company later released its Full Self-Driving software, which added more features. These early steps were the beginning of the journey toward the robotaxi plans of today.

The first Tesla car, the Roadster

Tesla’s first car was the Roadster, which was first made in 2008. It was an electric sports car that could quickly go from 0 to 60 miles per hour.

This car was not made in large numbers. The Roadster was mainly a way to show that electric cars could be fast and cool. It was a proof of concept that led to the company’s bigger and more ambitious projects.

The Model S and Model X

After the Roadster, Tesla released two important cars that showed it could make cars for the luxury market. The Model S came out in 2012 and was a popular sedan.

Later, the Model X was released in 2015. These cars were more expensive than the Model 3. But they helped to change how people thought about electric cars. They showed that an electric car could be a high-end, high-performance vehicle.

Curious about what sparked Musk’s frustration? Dive into Elon Musk slams ‘corruption’ over missing superchargers.

Tesla’s early stock market days

When Tesla first became a public company in 2010, its stock was worth much less than it is today. For many years, people were unsure if the company would succeed. It was seen as a small, risky company.

However, as Tesla built more cars and grew, its stock price increased significantly. This growth showed that investors started believing in the company’s ability to change the car world and go for even bigger goals.

Want to know how close Tesla came to changing hands? Read more in the time Elon Musk nearly sold Tesla to Google.

What’s your take on Tesla’s $8.5T dream? Share below.

Read More From This Brand:

• Tesla Revisits Elon Musk’s Bonus After Legal Setback
• Tesla and Elon Musk face shareholder lawsuit over Robotaxi statements
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This slideshow was made with AI assistance and human editing.