What does $48 billion get Tesla investors? A return of the old Elon Musk

(Emil Lendof/The Wall Street Journal)
(Emil Lendof/The Wall Street Journal)


The CEO filled shareholders’ heads with visions of robots and driverless cars, but the come with a cost beyond his pay package.

Elon Musk is acting like a guy who just received a record payday.

He danced on stage. Jumped for joy. And excitedly talked about a future involving billions of humanoid robots, saying it could stretch Tesla’s valuation to $30 trillion some day, or about 10 times the current value of the world’s most valuable public company.

Tesla shareholders got their wish: Old Elon had returned.

Despite the excitement, it wasn’t clear how long the hangover might linger after an unusual proxy campaign that saw some shareholders openly questioning the chief executive officer’s commitment to the company.

All it took for him to dance again was for shareholders to vote Thursday to reauthorize his $48 billion pay package. A Delaware judge had rescinded the 2018 deal earlier this year, throwing the electric-car maker into chaos amid worries he would leave in a huff.

“We’re headed for a wild future," he told investors at the company’s Austin, Texas, headquarters during the more than two-hour shareholder meeting. “Wild, wild, wild."

Beyond Musk’s talk of offering “Star Wars"-like robots, there’s real concern among some investors about the current state of Tesla’s car business, with sales falling in the first quarter and tough new rivals emerging from China.

Plus, he has been talking for years about deploying fully driverless car technology without success.

“Now admittedly, I’m a little optimistic sometimes," Musk told investors to laughter. “I don’t have a complete lack of self-awareness, but if I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist."

Then there was the stark juxtaposition of his rosy comments following the vote and his threats in recent months to take his best ideas for robots and artificial intelligence elsewhere if he wasn’t granted 25% of Tesla’s shares.

Ask any therapist: Threatening divorce during a flash of anger can crack a relationship’s very foundation. What began as a quarrel can escalate into something existential.

‘A superhero dictatorship’

Two lawsuits were filed in Delaware this past week accusing Musk and the Tesla board of wrongdoing, in part, over his efforts to create a separate AI company seemingly in competition with the automaker. Tesla hasn’t yet responded to the claims, and Musk has suggested that Tesla could benefit from his startup xAI.

“Could the CEO of Coca-Cola loyally start a competing soft-drink company on the side, then divert scarce ingredients from Coca-Cola to the startup?" a lawsuit brought Thursday by the Cleveland Bakers and Teamsters Pension Fund and other investors asked. “No special rules apply to Tesla or Musk. Yet, at Tesla, the preposterous has become reality."

For some investors, Thursday’s vote was a referendum on whether they were OK with Musk’s being essentially a part-time CEO of Tesla along with overseeing five other companies, including Twitter-turned-X.

“Tesla is Musk’s liquid piggy bank, since it’s publicly traded; his other companies are not," investor James McRitchie said during a prevote presentation advocating for certain corporate-governance changes. “Either he sticks around long enough to use our shareholder capital to fund his other ventures, or he shifts his attention sooner if we reject his pay package and turn off the money tap."

“Bite the bullet," McRitchie added, “prepare for a future that doesn’t depend on a superhero dictatorship."

The crowd booed McRitchie. This was a crowd fully embracing Musk. For them, seemingly, Any Elon is better than No Elon. They came dressed in Tesla shirts and chanted his name: Elon, Elon, Elon.

“If you can see me, I’m trembling uncontrollably," one shareholder said to Musk during a Q&A. “I really look up to you [as] a shareholder, consumer—tripled my humble, tiny little portion of…shares."

Priming Optimus

Another investor asked if Tesla could achieve that projected $30 trillion valuation without Musk at the wheel. Musk replied Tesla has a good future without him, but that he adds something special.

“I think I am a helpful accelerant to that future," Musk said to cheers.

Rivals, Musk warned, would eventually succeed with their own robots. “What really matters is can we be much faster than everyone else?" he continued.

His message was clear: I am your only hope.

It was a similar gamble back in 2016, when he first revealed the Model 3—a bet-the-company electric sedan aimed at the masses that he rushed into production, trying to beat rivals with their own offerings.

Now, instead of focusing on the company’s next EV model, Musk is talking more about technology that isn’t as tested or as certain.

He touted development of the company’s humanoid robot, dubbed Optimus, which made its conceptual debut in 2021 as a person in costume dancing on stage. Now, Musk said, Tesla has actual robots doing tasks at its factory in Fremont, Calif.

“We actually have quite a few of these cruising around our offices in Palo Alto," he said.

Next year, Musk predicted, more than 1,000 humanoid robots would be working at Tesla. In 2026, he suggested, Tesla’s humanoid robot would be able to handle a range of tasks, including ones that it hasn’t done before.

Ultimately, he expects the number of humanoid robots to far exceed the population of humans on Earth. In that scenario, he said, Tesla could be making more than 100 million of those robots annually—or roughly the same number of cars currently produced each year by the entire automotive industry—at a profit of $1 trillion.

“Even the most optimistic estimates that I have seen for Optimus…undercount the magnitude of what the robot will be able to do," Musk said.

He suggested Optimus alone could add $25 trillion to the company’s market value without giving a date for achieving such a threshold. That’s on top of the $5 trillion to $7 trillion in valuation possible from achieving driverless vehicles by 2029, as predicted by investor Cathie Wood’s ARK Funds, Musk said.

“I don’t want to trivialize what’s necessary to get there," Musk said. “It’s an immense amount of work that is required to get there—like super difficult—but we are moving very fast down that road."

For Musk skeptics, it was another example of his overinflating expectations. For Musk believers, it was gospel to their ears—the reason why they voted for his pay in hopes of keeping him around longer. More cheers erupted.

“I think we’re not just opening a new chapter for Tesla," Musk at one point told them. “We’re starting a new book." The Book of Elon.

Write to Tim Higgins at tim.higgins@wsj.com

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