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Musk responds to pay case lawyers requesting $6 billion in Tesla shares

Credit: Public domain (via Wikimedia Commons)

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Elon Musk has responded to lawyers in the recent Delaware case regarding his Tesla compensation package, after the attorneys this week requested legal awards of 29 million Tesla shares — worth almost $6 billion.

Musk’s pay package at Tesla was rejected in late January by Judge Kathaleen McCormick of the Delaware Court of Chancery, as part of a 2018 case brought forward by shareholder Richard Tornetta. Following the decision to void Musk’s $55.8 billion compensation package just over a month ago, Tornetta’s lawyers argued in a filing on Friday that they deserve over 29 million Tesla shares as their legal fees, worth around $5.95 billion at the company’s current valuation (via Bloomberg).

In the filing, the lawyers also explained why they requested the fee in Tesla stock instead of cash.

“We are prepared to ‘eat our cooking,’” Tornetta’s lawyers wrote. “This structure has the benefit of linking the award directly to the benefit created and avoids taking even one cent from the Tesla balance sheet to pay fees. It is also tax-deductible by Tesla.”

Tesla and Elon Musk to appeal $56B pay package decision

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Tornetta’s case was brought to the court on behalf of shareholders, so roughly 267 million Tesla shares that would have been a part of Musk’s pay package are now expected to be returned to the company, according to the filing.

Tulane University Corporate Law Professor Ann Lipton says the legal team’s payout could be the largest attorney fee ever requested, at least that she’s familiar with.

“Now, to be fair, the case involved the largest compensation award ever to an executive,” Lipton added to Bloomberg.

“I assume the plaintiffs’ attorneys figured if they sought $6 billion in cash in fees it could cripple Tesla,” she says. “Since the case involved a stock award to Musk, they thought it would be appropriate to ask for the fee in shares so it wouldn’t be as rough for Tesla shareholders. That makes a lot of sense to me.”

Following the filing, multiple Tesla executives responded, including Musk himself.

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In a flurry of posts on X on Saturday, Musk criticized the request, calling it “utterly disgraceful,” “ironic,” “criminal,” and saying that the the lawyers were “evil” in two separate replies. You can see just a couple of his posts below.

Rohan Patel, Tesla’s Vice President of Public Policy and Business Development, also responded to the reports, noting that he believed other employees at the company would be “equally disgusted” by the news.

After Judge McCormick’s decision to void Musk’s compensation package, made on January 30, the multi-company executive has motioned to move the incorporations of SpaceX, The Boring Company and Neuralink out of Delaware, and he’s expected to do the same with Tesla.

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Musk has also been outspoken since the decision, noting that Tesla plans to appeal the decision and pointing to how much the lawyers representing Tornetta could profit from this trial. In response to an early February report, Musk said it was “so deeply and utterly wrong that a law firm that harmed Tesla could stand to gain billions.”

THIS TIME LAST YEAR:

Elon Musk’s lawyers to make closing arguments in CEO’s pay package case

What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send your tips to us at tips@teslarati.com.

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Zach is a renewable energy reporter who has been covering electric vehicles since 2020. He grew up in Fremont, California, and he currently lives in Colorado. His work has appeared in the Chicago Tribune, KRON4 San Francisco, FOX31 Denver, InsideEVs, CleanTechnica, and many other publications. When he isn't covering Tesla or other EV companies, you can find him writing and performing music, drinking a good cup of coffee, or hanging out with his cats, Banks and Freddie. Reach out at zach@teslarati.com, find him on X at @zacharyvisconti, or send us tips at tips@teslarati.com.

Investor's Corner

Tesla needs to confront these concerns as its ‘wartime CEO’ returns: Wedbush

Tesla will report earnings for Q2 tomorrow. Here’s what Wedbush expects.

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Credit: Tesla

Tesla (NASDAQ: TSLA) is set to report its earnings for the second quarter of 2025 tomorrow, and although Wall Street firm Wedbush is bullish as the company appears to have its “wartime CEO” back, it is looking for answers to a few concerns investors could have moving forward.

The firm’s lead analyst on Tesla, Dan Ives, has kept a bullish sentiment regarding the stock, even as Musk’s focus seemed to be more on politics and less on the company.

However, Musk has recently returned to his past attitude, which is being completely devoted and dedicated to his companies. He even said he would be sleeping in his office and working seven days a week:


Nevertheless, Ives has continued to push suggestions forward about what Tesla should do, what its potential valuation could be in the coming years with autonomy, and how it will deal with the loss of the EV tax credit.

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Tesla preps to expand Robotaxi geofence once again, answering Waymo

These questions are at the forefront of what Ives suggests Tesla should confront on tomorrow’s call, he wrote in a note to investors that was released on Tuesday morning:

“Clearly, losing the EV tax credits with the recent Beltway Bill will be a headwind to Tesla and competitors in the EV landscape looking ahead, and this cash cow will become less of the story (and FCF) in 2026. We would expect some directional guidance on this topic during the conference call. Importantly, we anticipate deliveries globally to rebound in 2H led by some improvement on the key China front with the Model Y refresh a catalyst.”

Ives and Wedbush believe the autonomy could be worth $1 trillion for Tesla, especially as it continues to expand throughout Austin and eventually to other territories.

In the near term, Ives expects Tesla to continue its path of returning to growth:

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“While the company has seen significant weakness in China in previous quarters given the rising competitive landscape across EVs, Tesla saw a rebound in June with sales increasing for the first time in eight months reflecting higher demand for its updated Model Y as deliveries in the region are starting to slowly turn a corner with China representing the heart and lungs of the TSLA growth story. Despite seeing more low-cost models enter the market from Chinese OEMs like BYD, Nio, Xpeng, and others, the company’s recent updates to the Model Y spurred increased demand while the accelerated production ramp-up in Shanghai for this refresh cycle reflected TSLA’s ability to meet rising demand in the marquee region. If Musk continues to lead and remain in the driver’s seat at this pace, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle.”

Tesla will report earnings tomorrow at market close. Wedbush maintained its ‘Outperform’ rating and held its $500 price target.

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Investor's Corner

Tesla (TSLA) Q2 2025 earnings call: What investors want to know

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Credit: Tesla Asia/X

Tesla (NASDAQ:TSLA) is set to report its second-quarter 2025 financial results on Wednesday, July 23, after markets close. With this in mind, Tesla investors have aggregated their top questions for the company at its upcoming Q&A session.

The upcoming earnings report follows a mixed delivery quarter. Tesla produced over 410,000 vehicles and delivered more than 384,000 units globally. In the energy segment, Tesla deployed 9.6 GWh of storage products, continuing momentum for its Megapack business. Tesla’s vehicle sales are currently down year-over-year, though a good part of this was due to the Model Y changeover in the first quarter.

Following are Tesla investors’ top questions for management, as aggregated in Say.

  1. Can you give us some insight (into) how robotaxis have been performing so far and what rate you expect to expand in terms of vehicles, geofence, cities, and supervisors?
  2. What are the key technical and regulatory hurdles still remaining for unsupervised FSD to be available for personal use? Timeline?
  3. What specific factory tasks is Optimus currently performing, and what is the expected timeline for scaling production to enable external sales? How does Tesla envision Optimus contributing to revenue in the next 2–3 years?
  4. Can you provide an update on the development and production timeline for Tesla’s more affordable models? How will these models balance cost reduction with profitability, and what impact do you expect on demand in the current economic climate?
  5. When do you anticipate customer vehicles to receive unsupervised FSD?
  6. Are there any news for HW3 users getting retrofits or upgrades? Will they get HW4 or some future version of HW5?
  7. Have any meaningful Optimus milestones changed for this year or next, and will thousands of Optimus be performing tasks in Tesla factories by year-end?
  8. Will there be a new AI day to explain the advancements the Autopilot, Optimus, and Dojo/chip teams have made over the past several years? We still do not know much about HW4.
  9. Cybertruck ramp is now a year in, but sales have lagged other models. How are you thinking through boosting sales of such an incredible product?
  10. When will there be a new CEO compensation package presented and considered for the next stage of the company’s growth?

Tesla will release its Q2 update letter on its Investor Relations website after markets close on Wednesday. A live Q&A webcast with management will then follow at 4:30 p.m. CT (5:30 p.m. ET) to discuss the company’s performance and outlook.

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Tesla Model Y becomes dual champ in China’s vehicle sales rankings

The Model Y’s recent accomplishments suggest that Tesla really has created something special with the all-electric crossover.

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Credit: Tesla Asia/X

The Tesla Model Y was recently deemed a double champion in China, with the all-electric crossover topping two notable sales charts in the country’s automotive sector. 

The Model Y’s recent accomplishments suggest that Tesla really has created something special with the all-electric crossover, as it has continued to outsell even vehicles that are newer and more affordable. 

Tesla China’s announcement

In a post on Weibo, Tesla China VP Grace Tao highlighted that the Model Y topped China’s sales of SUVs, as well as vehicles that are priced in the 200,000-400,000 yuan range. This is quite remarkable, as the Model Y is one of the more costly entries in both lists. She also invited everyone to try out the vehicle for themselves. “You will know the champion strength after a try,” the Tesla VP wrote.

For the first half of the year, the Tesla Model Y sold 171,491 units domestically in China. This number was enough to make it the country’s best-selling SUV and vehicle priced in the 200,000-400,000 yuan range, but it could still easily be higher in the second half of 2025.

This was because Tesla initiated a changeover in Gigafactory Shanghai to shift the facility’s Model Y line to the vehicle’s new iteration. Had Tesla sold the Model Y in full force during the first half of 2025 in China, the vehicle’s domestic sales figures would have been even more impressive.

Model Y L coming

Tesla China’s Model Y sales could see a notable boost in the second half of the year due to the addition of the Model Y L, an extended wheelbase version of the all-electric crossover. Tesla is yet to announce the details for the Model Y L, though the vehicle was listed in the MIIT regulatory catalog as a six-seater. This is game-changing, as the Model Y’s previous seven-seat configurations have caught criticism for being far too cramped and unusable for adults.

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With the six-seat Model Y in the company’s lineup, Tesla would be able to compete with popular vehicles from rivals like BYD, which have made it a point to release spacious three-row vehicles that are designed to carry the whole family. Provided that the Model Y L is priced correctly, it could very well raise Tesla’s vehicle sales this year.

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