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Tesla starts setting the stage for the $35k base Model 3’s production ramp

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Tesla’s production ramp for the Model 3 has not been easy for the company. Since starting the production of the electric sedan last year, the Model 3 ramp has been beset by multiple challenges, including bottlenecks in both the Fremont factory and Gigafactory 1. That said, Tesla appears to have hit its stride in manufacturing the electric sedan in Q3.

The company’s production and delivery numbers for the quarter are yet to be announced, but estimates, including those from Tesla’s staunchest critics from Wall Street, are high that the company has achieved its target of manufacturing and delivering more than 50,000 Model 3 in the third quarter. And this is despite the company only producing three variants of the electric sedan — the Long Range RWD, Dual Motor AWD, and Dual Motor Performance Model 3. The variant of the electric car that is designed to be a true disruptor in the auto industry — the $35,000 Standard trim Model 3 — is yet to enter production. 

The absence of the $35,000 base trim Model 3 in Tesla’s lineup is one of the remaining bear thesis against the company. Some of Tesla’s more aggressive short-sellers even insist that the $35,000 Model 3 is a myth. Kelly Blue Book analyst Rebecca Lindland, who canceled her Model 3 reservation due to delays in the electric car’s production, previously noted to Forbes that she is not sure Tesla will ever make the vehicle.

“I’m not sure there will ever be any $35,000 cars. I think there’s a chance the company will eventually say they’re canceling that version because there wasn’t as much customer interest, that nobody wanted it,” she said.

A Tesla Model 3 being assembled.

Elon Musk begs to differ. Earlier this year, Musk noted that Tesla would need to hit its stride producing the higher-margin Model 3 variants before it can begin manufacturing the $35,000 Standard trim Model 3. Musk has since provided brief updates on the vehicle, such as its estimated start of production in Q1 2019, as well as an AWD Dual Motor option for the electric car. Tesla’s head of investor relations Martin Viecha provided an estimated timeline for the electric car’s production while facilitating a tour of Gigafactory 1 as well, stating that the $35,000 base Model 3’s would ramp “in the next eight months,” translating to an April or May rollout.   

Considering recent updates from Tesla’s Model 3 ramp, it appears that the electric car maker is starting to make preparations for the vehicle’s production. Gigafactory 1, for example, is set to receive upgrades from Panasonic that would enable it to produce more battery cells. Yoshio Ito, head of Panasonic’s automotive business, noted that three new battery cell production lines would be completed sooner than the Japanese company’s initial “end-of-2018” estimate. Apart from this, Tesla is also receiving upgrades in the form of new Grohmann machines that are expected to be installed at the end of Q3 or the beginning of Q4. The new Grohmann machines are designed to make module production in Gigafactory 1 three times faster and three times cheaper.

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In the final weekend of Q3, updates from Elon Musk and the Tesla community suggested that the production ramp for the Model 3 is going even further. In an email to employees, Musk noted that production of Model 3 drive units had reached a rate of 10,000 per week. Reservation holders in forums such as the r/TeslaMotors subreddit have also noted that the estimated timeline for the $35,000 base Model 3 has remained consistent over the past months. As of October 1, reservation holders are given a 3-6 month timeline for the production of the $35,000 electric sedan.

Tesla’s estimated timeline for the $35,000 Standard trim Model 3 as of October 1, 2018. [Credit: teslamodel3fan/Reddit]

The Tesla Model 3 is a critical part of Elon Musk’s Master Plan, which involved creating a mass-market car that is a preferable alternative to comparably-priced fossil fuel-powered vehicles. At $35,000, the Standard trim Model 3 would be in the same price range as some of America’s most ubiquitous cars like the Toyota Camry, whose top-of-the-line XSE V6 trim is priced at $34,950. Thus, if Tesla plays its cards right, the vehicle could become not just a top-selling electric car — it could very well be a fossil fuel car killer.

In true Tesla fashion, even the $35,000 Standard trim Model 3 is packed with features that are characteristic of the company. The base Model 3 has an estimated range of 220 miles per charge, a 0-60 mph time of 5.6 seconds, and a top speed of 130 mph. Just like Tesla’s less affordable vehicles, the base Model 3 is fitted advanced safety features, including eight cameras, forward radar, and 12 ultrasonic sensors enabling active safety technologies including collision avoidance and automatic emergency braking. Six front row airbags and two side curtain airbags are also fitted on the entry-level vehicle.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package

“Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.”

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tesla
(Credit: Tesla)

Tesla’s Board of Directors has proposed a new pay package for company CEO Elon Musk that would result in $1 trillion in stock offerings if he is able to meet several lofty performance targets.

Musk, who has not been meaningfully compensated since 2017, completed his last pay package by delivering billions in shareholder value through a variety of performance-based “tranches,” which were met and resulted in the award of billions in stock.

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

However, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.”

Now, the company is taking steps to ensure Musk gets paid, as the Board feels that it is crucial to retain its CEO, who has been responsible for much of the company’s success.

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This is not a statement to undermine the work of all of Tesla’s terrific employees, but a ship needs to be captained by someone, and Musk has proven he is the right person for the job.

The Board also believes that, based on a statement made by the company in its proxy, various issues will be discussed during the upcoming Shareholder Meeting.

Robyn Denholm and Kathleen Wilson-Thompson recognized Musk’s contributions in a statement, which encouraged shareholders to vote to approve the payout:

“We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensure that Elon was only paid for the performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challegnes Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2108 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.

Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.

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In addition to these unprecedented performance milestones, the 2025 CEO Performance Award also includes innovative structural features, born out of the special committee’s considered analysis and extensive shareholder feedback. These features include supercharged retention (at least seven and a half years and up to 10 years to vest in the full award), structural protections to minimize stock price volatility due to administration of this award and, thereafter, incentives for Elon to participate in the Board’s continued development of a framework for long-term CEO Succession. If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”

Musk will have a lot of things to accomplish to receive the 423,743,904 shares, which are divided into 12 tranches.

However, the Board feels he is the right person for the job, and they want him to remain the CEO. This package should ensure that he stays with Tesla, as long as shareholders feel the same way.

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Investor's Corner

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

Shareholders are expected to vote on the proposal at the annual meeting on November 6.

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USAFA_Hosts_Elon_Musk_(Image_1_of_17)_(cropped)
U.S. AIR FORCE ACADEMY, Colo. -- Tesla Inc. Chief Executive Officer Elon Musk poses for a photograph with U.S. Air Force Academy Cadets in Mitchell Hall during a tour hosted by Superintendent Lt. Gen. Richard Clark on April 7, 2022. Musk met with Academy senior leadership and delivered remarks to a crowd of cadets and faculty. (U.S. Air Force photo by Justin R. Pacheco)

Tesla’s board has proposed a new compensation package for CEO Elon Musk that could make him the world’s first trillionaire and Tesla the most valuable company in history. 

The 2025 CEO Performance Award, outlined in a securities filing on Friday, would be worth up to $900 billion in Tesla stock (NASDAQ:TSLA) if the automaker achieves a series of aggressive performance and valuation goals, according to the New York Times

Shareholders are expected to vote on the proposal at the annual meeting on November 6.

Tesla is aiming for an insane $8.5 trillion market cap

The package requires Musk to lift Tesla’s market capitalization from about $1.1 trillion today to $8.5 trillion over the next decade. At that level, Tesla would surpass every major public company in existence. Nvidia, currently the world’s most valuable firm, has a market cap of around $4.2 trillion today, as noted in a Motley Fool report. Microsoft and Apple follow at $3.8 and 3.6 trillion each, while Saudi Aramco is valued at around $1.5 trillion.

If Tesla achieves its $8.5 trillion target, it would be worth more than twice Nvidia’s present valuation and nearly eight times its current size. The compensation plan also requires Tesla’s operating profit to grow from $17 billion last year to $400 billion annually.

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Credit: Tesla

Elon Musk’s path to a trillionaire status

Apart from leading Tesla to become the world’s biggest company in history, Musk is also required to hit several product targets for the electric vehicle maker. These include the delivery of 20 million Tesla vehicles cumulatively, 10 million active FSD subscriptions, 1 million Tesla bots delivered, and 1 million Robotaxis in operation.

Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson said retaining Musk is “fundamental to Tesla achieving these goals and becoming the most valuable company in history.” If successful, the plan would raise Musk’s Tesla stake from 13% to about 25%, further consolidating his control. It would also result in the CEO earning $900 billion in TSLA stock, allowing him to effectvely become a trillionaire. 

The proposal mirrors a 2018 compensation plan that was invalidated in Delaware court earlier this year in the way that it is focused on very aggressive targets and operational milestones. Tesla has since shifted its corporate registration to Texas, where challenges from potential activist shareholders are less of a risk.

Tesla’s SEC filing can be viewed below.

www-sec-gov-Archives-edgar-data-1318605-000110465925087598-tm252289-4_pre14a-htm… by Simon Alvarez

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Investor's Corner

Shareholder group urges Nasdaq probe into Elon Musk’s Tesla 2025 CEO Interim Award

The SOC Investment Group represents pension funds tied to more than two million union members, many of whom hold shares in TSLA.

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Credit: xAI/X

An investment group is urging Nasdaq to investigate Tesla (NASDAQ:TSLA) over its recent $29 billion equity award for CEO Elon Musk. 

The SOC Investment Group, which represents pension funds tied to more than two million union members—many of whom hold shares in TSLA—sent a letter to the exchange citing “serious concerns” that the package sidestepped shareholder approval and violated compensation rules.

Concerns over Tesla’s 2025 CEO Interim Award

In its August 19 letter to Nasdaq enforcement chief Erik Wittman, SOC alleged that Tesla’s board improperly granted Musk a “2025 CEO Interim Award” under the company’s 2019 Equity Incentive Plan. That plan, the group noted, explicitly excluded Musk when it was approved by shareholders. SOC argued that the new equity grant effectively expanded the plan to cover Musk, a material change that should have required a shareholder vote under Nasdaq rules.

The $29 billion package was designed to replace Musk’s overturned $56 billion award from 2018, which the Delaware Chancery Court struck down, prompting Tesla to file an appeal to the Delaware Supreme Court. The interim award contains restrictions: Musk must remain in a leadership role until August 2027, and vested shares cannot be sold until 2030, as per a Yahoo Finance report.

Even so, critics such as SOC have argued that the plan does not have of performance targets, calling it a “fog-the-mirror” award. This means that “If you’re around and have enough breath left in you to fog the mirror, you get them,” stated Brian Dunn, the director of the Institute for Comprehension Studies at Cornell University.

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SOC’s Tesla concerns beyond Elon Musk

SOC’s concerns extend beyond the mechanics of Musk’s pay. The group has long questioned the independence of Tesla’s board, opposing the reelection of directors such as Kimbal Musk and James Murdoch. It has also urged regulators to review Tesla’s governance practices, including past proposals to shrink the board. 

SOC has also joined initiatives calling for Tesla to adopt comprehensive labor rights policies, including noninterference with worker organizing and compliance with global labor standards. The investment group has also been involved in webinars and resolutions highlighting the risks related to Tesla’s approach to unions, as well as labor issues across several countries.

Tesla has not yet publicly responded to SOC’s latest letter, nor to requests for comment.

The SOC’s letter can be viewed below.

Nasdaq+Letter Tsla Socig Final by Simon Alvarez

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