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Tesla TSLA is back in the spotlight as shareholders prepare to vote on CEO Elon Musk’s massive pay package — worth around $1 trillion. The proposal, which needs shareholder approval, has stirred debate over both its size and necessity. Robyn Denholm, Chair of the Board, confirmed that voting closes today at 11:59 p.m. ET, with the final count to be revealed at Tesla’s annual general meeting tomorrow.
It will be a big day for the company. The board believes Musk’s leadership is the only way Tesla can successfully pivot into artificial intelligence (AI), autonomous vehicles (AVs) and robotics. But as investors await the verdict, the key question remains: how is Tesla positioned currently, and is now the right time buy its shares?
The proposed package has been quite controversial. Many large and high-profile Tesla backers like Cathie Wood and Michael Dell have already pledged to vote in favor of Musk. Baron Capital Management has also backed Musk’s pay, calling him the company’s “most valuable asset.”
It’s worth noting here is that Musk will be rewarded only if he meets the targets tied to the pay package. That includes boosting adjusted EBITDA 25-fold to $400 billion by 2035, hitting a market value of $8.5 trillion (from just around $1.5 trillion today). Additionally, it will have to sell 20 million vehicles by 2035, add 10 million Full Self-Driving subscriptions, deploy 1 million robotaxis and deliver 1 million humanoid robots. If Musk succeeds in achieving these milestones, it will increase shareholder value significantly. These incentives are constructed such that if Elon wins, shareholders win.
Still, many critics are concerned about the size of the package. Yesterday, a major institutional investor, Norway’s sovereign-wealth fund — which owns more than 1% stake in the electric vehicle (EV) giant — disclosed that it would vote against Musk’s massive remuneration package. While the Norwegian fund recognizes the value Musk has created for Tesla, it’s worried about how huge the pay package is, the potential share dilution and the company’s heavy reliance on him. And these concerns are similar to what proxy advisors Glass Lewis and ISS have also said, urging investors to vote against the compensation plan.
Despite the pushback, approval appears likely. Prediction market Polymarket currently gives the pay package a 93% chance of passing.
The board, meanwhile, continues to defend its position. Denholm credits Musk for making Tesla the only profitable U.S. EV maker and argues that his compensation is strictly based on performance. She’s also warned that without the right incentives, Tesla risks losing the person it believes is key to its success. Quoting Denholm, “We run the risk that he gives up his executive position, and Tesla may lose his time, talent and vision, which have been essential to delivering extraordinary shareholder returns.”
Musk, indeed, has been instrumental in Tesla’s success but some may argue how fair it is for shareholders to be pressured by the threat of a walkout from a single executive. Should a company worth hundreds of billions really hinge so heavily on one man?
Tesla delivered 497,099 vehicles in the third quarter of 2025, up 7.4% year over year and marking a new quarterly record. However, much of this strength likely came from buyers rushing to secure the soon-to-expire $7,500 federal EV tax credit — a “pull forward” effect seen across the industry, with Ford F and General Motors GM also reporting record sales.
October data, however, paints a weaker picture. Tesla’s sales plunged across Europe — down 89% in Sweden, 86% in Denmark, 50% in Norway and 48% in the Netherlands — while China sales fell 10% year over year. Demand pressures stem from an aging lineup, growing competition and shrinking pricing power. Management has already warned that margins will remain under pressure from price cuts and higher costs.
One bright spot is Tesla’s Energy Storage business, which delivered record deployments across residential, industrial and utility markets. Strong demand for Megapack and Powerwall systems has made this Tesla’s most profitable division.
Meanwhile, Tesla’s robotaxi initiative, launched in Austin in June, has expanded to California, Nevada, and Arizona. With millions of vehicles already equipped with self-driving hardware, the company is well positioned to scale as regulations evolve. Musk aims to pilot robotaxis in 8–10 metro areas by year-end.
Tesla’s focus remains on upcoming launches — the Cybercab, Tesla Semi, and Megapack 3 — all expected in 2026. Its Optimus humanoid robot also remains on track for a production-intent prototype next year. Financially, Tesla is solid, ending third quarter with more than $41 billion in cash/investments and generating a record $4 billion in free cash flow.
Shares of Tesla have gained around 10% year to date, underperforming the industry. General Motors and Ford have risen 25% and 29%, respectively, over the same timeframe.
From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.89, way above the industry. Tesla carries a Value Score of D. Meanwhile, General Motors trades at a forward sales multiple of 0.35 and Ford at 0.31.
The consensus mark for Tesla’s 2025 revenues and EPS implies a year-over-year decline of 3.3% and 32.6%, respectively. See how the Zacks Consensus Estimate for TSLA’s earnings has been revised over the past 90 days.
All eyes are now on Tesla’s annual shareholder meeting. There’s little doubt that Musk’s pay package will be approved. Supporters see him as the visionary who can turn big ideas into reality — but the targets tied to his compensation are extremely ambitious. And let’s not forget that Tesla has a track record of delayed timelines and lofty promises that take longer to materialize.
With sales slowing, competition intensifying and major projects like robotaxis and AI still years from driving profits, execution risk remains high. At this stage, investing in Tesla is more a bet on its long-term vision than near-term fundamentals.
With the stock carrying a Zacks Rank #3 (Hold), investors may be better off staying on the sidelines until there’s clear evidence of sustained growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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This article originally published on Zacks Investment Research (zacks.com).
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