Tesla Shareholders' $1T Vote of Confidence: Can Musk Deliver?

Tesla TSLA shareholders have shown big faith in CEO Elon Musk, with around 75% voting in favor of his controversial pay package worth roughly $1 trillion. Musk expressed his gratitude, saying, “I super appreciate it. Thank you, everyone,” he said. “What we’re about to embark upon is not merely a new chapter on the future of Tesla but a whole new book.”

Now the question is—can he live up to investors’ confidence in him?

A Trillion-Dollar Challenge

Musk’s pay package, one of the largest ever conceived, is entirely performance-based—spread across 12 tranches tied to aggressive market cap and operational goals.

To unlock the full payout, Tesla’s adjusted EBITDA has to rise 25 times to $400 billion in 2035. The company would need to reach a market value of $8.5 trillion by 2035, up from just over $1.5 trillion at present. Beyond market value, the plan calls for 20 million vehicles sold by 2035, 10 million active Full Self-Driving (FSD) subscriptions, 1 million commercially operating robotaxis, and 1 million humanoid robots delivered.

Tesla’s next growth chapter hinges on its ventures in artificial intelligence (AI), autonomous vehicles (AVs) and robotics. The pay package has been designed to deepen Musk’s focus on Tesla and align his long-term incentives with the company’s growth in emerging technologies.

Currently, Musk is already Tesla’s largest shareholder. If he achieves all the milestones tied to his remuneration, his stake would rise by about 12%, taking his total ownership to around 25%. That’s a lot of control in one person’s hands. But by approving this colossal package, investors are essentially saying that they fully trust Musk to lead Tesla into its AI-driven future.

Can Musk Deliver on That Trust?

Here’s where things get complicated. Tesla’s core EV business is struggling. After its first-ever annual delivery decline in 2024, sales fell 13% year over year in both Q1 and Q2 of 2025.  While Q3 saw a temporary lift from buyers rushing to grab expiring U.S. EV tax credits, the trend remains weak. With those incentives now gone and Chinese rivals flooding the market, Q4 could bring another drop. Europe is leading the sales downturn, and Tesla’s automotive margins remain squeezed by ongoing price cuts, high costs and now tariffs.

Basically, Tesla’s brand magic has dimmed a bit, and the EV market isn’t the hottest story it once was.And that’s why Musk is pinning hopes on what he believes to be the next big things—robotaxis, humanoid robots and AI.

Tesla’s next phase is about creating an ecosystem where autonomous vehicles and AI-powered robots could reshape everyday life. The vision— millions of Teslas driving themselves as part of a robotaxi network, and humanoid robots—like the “Optimus”—working in homes and factories.

But right now, these projects are still far from reality. Tesla’s robotaxi prototypes still require safety drivers, and the company hasn’t begun taking orders for its humanoid robots. Meanwhile, competitors like Waymo are leading the driverless race, and several robotics companies are racing ahead on automation tech. Tesla might have the brand recognition and data advantage, but execution, regulation and safety remain massive hurdles now.

Final Thoughts

Shareholders have made an extraordinary bet on Musk’s ability to lead Tesla into its next era. They’ve handed him both a vote of confidence and an enormous challenge. But with EV demand cooling, margins under pressure and futuristic projects far from mass adoption, the road ahead won’t be easy.

Whether Musk can truly turn Tesla into an AI, robotics, and autonomous powerhouse will determine if this trillion-dollar faith pays off.

The Zacks Rundown on Tesla

Shares of Tesla have risen roughly 10% year to date, underperforming the industry as well as U.S. auto biggies like General Motors GM and Ford F. Ford and General Motors shares are up 32% and 29%, respectively, over the same timeframe.  

From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.93, way above the industry. It carries a Value Score of D. Meanwhile, General Motors trades at a forward sales multiple of 0.35 and Ford at 0.32.

See how the Zacks Consensus Estimate for TSLA’s earnings has been revised over the past 90 days.

Tesla stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research