"If a new compensation package for founder and CEO Elon Musk can hit $1 trillion over the course of 10 years, Tesla ( NASDAQ: TSLA) will be worth $8.5 trillion in the tenth year. That is more than twice NVIDIA's ( NASDAQ: NVDA) current market value, and eight times what Tesla's is today. Among the reasons Munster ran the numbers is that part of Musk's longer-term comp is tied to market cap. If there is no $8.5 trillion market cap, there is no $1 trillion compensation."
"Munster is skeptical about whether Musk's most important projects will be overwhelming successes. One is to transform Tesla into a robotics company. Muck's name for the robot is Optimus. It will be built as a "robotics humanoid." It will be able to handle most basic human tasks completely, and could be used by hundreds of millions of people. One hurdle is what people will have to buy. Another is the project's execution. And, as is true with some other Tesla products, it will have competition."
"Another decision could drive up Tesla's value. This would be a transaction between Tesla and Musk's xAI business. xIA is a race with OpenAI and the AI efforts by the world's largest tech companies. And the transaction could be complex. It could be a buyout, a license, or a new company that would own parts of both xAI and Tesla. Shareholders of each might have objections."
A $1 trillion ten-year compensation for Elon Musk would require Tesla to reach an $8.5 trillion market capitalization in year ten. The market-cap metric is the primary trigger in the compensation package, so the package cannot pay out without that valuation. Major initiatives face execution and demand risks, including transforming Tesla into a robotics company with the Optimus humanoid and pursuing fully self-driving vehicles amid city-level approvals and competition. A strategic transaction between Tesla and Musk's xAI—via buyout, license, or joint entity—could materially affect valuation but may face shareholder objections. Combining xAI and Tesla offers the clearest path to rapid market-cap growth.
Read at 24/7 Wall St.
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