Tesla Bets $1 Trillion on Musk to Navigate AI's Uncertain Future

Tesla’s board has proposed an extraordinary long-term compensation package for CEO Elon Musk, outlining a $1 trillion agreement aimed at securing his leadership through the end of the decade, according to recent developments. The package, which is tied to the company’s long-term goals, reflects Tesla’s strategy to maintain Musk’s influence as it navigates a challenging market and shifting business priorities.

The proposed deal is part of Tesla’s broader restructuring efforts, as the company shifts its focus from traditional electric vehicle (EV) manufacturing to AI-driven technologies, including autonomous vehicles and humanoid robots. This strategic pivot has led to delays in key product launches, including the Model YL, a six-seat variant of the Model Y that is set to debut in international markets but has been postponed indefinitely in the United States. CEO Elon Musk cited the rise of self-driving technology as a reason for the delay, stating that the U.S. market may not need the Model YL at all given the direction of Tesla’s future offerings.

Tesla’s shift in focus has also extended to its Optimus humanoid robot project, which Musk has positioned as a cornerstone of the company’s long-term value. According to the CEO, approximately 80% of Tesla’s future value will come from the Optimus line, despite repeated delays in production and technical setbacks. The recent “Master Plan, Part IV” document released by Tesla underscores this commitment to physical AI, signaling a broader industry trend as other tech leaders like Nvidia’s Jensen Huang also emphasize the potential of robotics in the next phase of AI development.

However, Tesla faces growing competition in the robotics sector. Startups like Figure AI have raised significant capital and are developing humanoid robots at potentially lower costs, while Chinese manufacturers are also accelerating their commercialization efforts. Despite these challenges, Tesla’s Optimus project remains a key point of investor attention, with Musk predicting long-term revenue potential in the tens of trillions of dollars. Analysts have noted that the success of the project is critical to maintaining Tesla’s stock valuation amid declining EV sales globally.

As Tesla navigates these transformations, the proposed $1 trillion compensation package for Musk highlights the company’s reliance on his leadership. While the structure and performance metrics for the deal have not been disclosed, it is clear that Tesla is investing heavily in ensuring Musk remains at the helm during this pivotal phase of the company’s evolution.

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[1] Elon Musk says 80% of Tesla's value will come from Optimus robots (https://fortune.com/2025/09/02/elon-musk-optimus-robots-tesla-master-plan/)

[2] Elon Musk shares bad news about Tesla model coveted by (https://finance.yahoo.com/news/elon-musk-shares-bad-news-002500552.html)