In September, Tesla (TSLA) directors proposed the largest executive pay package in corporate history to Elon Musk, worth up to $878 billion over 10 years. The board made it sound like Musk would need to pull off world-changing achievements—such as massive breakthroughs in robotics and self-driving cars, as well as significant increases in stock value and profits—to earn any of it. However, a Reuters investigation found that Musk could actually earn billions by selling fewer cars than Tesla sold in 2024 or by hitting vague product milestones.
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In addition, some of Musk’s performance goals are loosely defined, which could allow for big payouts without delivering on the promises investors might expect. For example, one goal calls for 10 million subscriptions to Tesla’s Full Self-Driving software, but doesn’t require it to be truly autonomous. Experts told Reuters that this goal could be met by simply lowering the price. Another target mentions putting one million robots into use, yet doesn’t specify that they must be humanoid, only that they use AI and have mobility.
Even Musk’s robotaxi goal, while it calls for no human driver, could allow for remote or passenger-seat control, much like Tesla’s early tests in Austin, Texas. Nevertheless, while some goals seem easy, others are much tougher. For instance, Musk would need to grow Tesla’s profits from $16.6 billion in 2024 to as much as $400 billion, a level that many experts believe is far more challenging than just raising the company’s market value. Still, many investors believe that Musk is uniquely capable of transforming Tesla into an AI and robotics powerhouse, and are willing to bet on him despite the risks.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 13 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $352.94 per share implies 18.1% downside risk.
