Elon Musk got his money.
At a meeting on Thursday, Tesla shareholders voted to re-approve an enormous pay package for Musk, the CEO, worth $45 billion or more depending on Tesla’s fluctuating stock price. The deal had been struck down in January by a judge in Delaware, where the EV company is (for now) incorporated. Musk spent much of the intervening months campaigning on his social network, X, for the gigantic package to be reinstated.
The vote puts to bed a variety of rumors and threats surrounding the electric car company — including, most seriously, that Musk would neglect Tesla in favor of his other companies if he didn’t get his way and might consider leaving for good, taking his talents for artificial intelligence and autonomous driving elsewhere. With his colossal payday back in place, he appears likely to stay and to push Tesla toward those fields.
It means, for better and for worse, that Tesla the company will remain tethered to the whims of its mercurial chief. While Musk excels at generating hype and driving up Tesla’s stock price (the thing that earned him the enormous payday in question), we may have lost our last chance to see what Tesla would look like if it matured into a normal, steady company that just makes good electric vehicles.
New companies, especially flashy startups out of Silicon Valley, often go through a transition moment when they must decide how to grow up. Sometimes that means moving on from the combustible, blue-sky founder or CEO who helped the company become a hit, but isn’t the right fit for growing into a large company on a solid foundation.
Now would have been Tesla’s time. With the introduction of the Model 3 and especially the Model Y, the EV-maker reached remarkable scale, with the latter becoming the best-selling EV in the United States and the best-selling car in the entire world in 2023. A more conventional business leader might have tried to expand Tesla’s huge lead in the EV market, and double down on the advantage it gained by convincing the other carmakers to adopt its charging standard by re-commiting to the Supercharger team. We might have seen this alternate universe Tesla fill the burgeoning EV space with crossovers of varying size to beat GM and Hyundai/Kia to the punch. We might have seen it commit to the entry-level EV project to grab the next group of Americans who’ll go electric.
Musk, though, built his entire brand on being seen as unconventional. Instead of introducing an electrified pickup truck that resembled everything else on the road, he built the Cybertruck. He laid off the Supercharger team just when things were looking up. Rather than introducing a slightly bigger or smaller version of the Model Y, he bought Twitter, and then tweeted a lot about AI while Tesla sales started to decline.
You take the bad with the good when it comes to Musk. With their ‘yes’ vote on his stock package, the company’s board and shareholders decided the good was worth it — and that by backing the horse that brought them, the company and its stock value could continue on to new heights. In doing so, they hitched their wagons to Musk’s notion that Tesla is decidedly not a car company, but rather a software and AI company that happens to put those things into vehicles. The Tesla in our timeline will live or die with projects such as the fully autonomous robotaxi Musk has promised to reveal in some capacity later this summer.
As many analysts predicted, the shareholders decided they needed Musk. Perhaps even more than he needed Tesla, if his big bluff can be believed. “Tesla is Elon,” as one investor put it. The chairperson of the Tesla board came right out and said that the shareholders needed to approve Musk’s stock deal to keep his attention focused on Tesla rather than SpaceX, X, or his other ventures.
Now, as the company recommits to his path, the question for everybody else is: How badly do we need Tesla?
Very badly is what I would have said just a few years ago. When I bought my Model 3 in 2019, the available competitors weren’t inspiring and the competing fast-charging networks were utterly unreliable. Tesla was responsible for taking EVs mainstream in the United States and it was by far the best hope for those who wanted to see more and more American cars go electric.
Things change in five years, though. The Model Y still rules the roost, but Tesla is losing ground to the good electric offerings that are finally coming from the legacy carmakers. With other EVs already using or soon to be able to use Tesla’s Supercharger network, one major competitive advantage that Musk’s company had in selling electric vehicles is disappearing. Maybe Musk will crack true-self driving. But as far as how important Tesla is to getting the average person into an EV, the answer looks to be: less and less all the time.
