

Investor's Corner
Tesla’s China factory can’t arrive soon enough amid escalating US-China trade war
Amidst the escalating trade war between the United States and China, American automakers such as Tesla have become the first victims of renewed, hefty tariffs on US-made products entering the country. In response to the 25% duties imposed by the United States government on $34 billion worth of Chinese imports last week, China has decided to strike back by placing a 40% levy on vehicles made in America.
The latest tariffs have forced Tesla to raise the prices of its Model S luxury sedan and its Model X SUV by 150,000 yuan ($22,647) to 250,000 yuan ($37,744). With the new duties in place, a fully-loaded Tesla Model S P100D now costs 1.47 million yuan ($221,937) in China, a far cry from the $147,000 price of the vehicle in the United States.
The latest tariffs come at a time when China implemented a reduction of its import duties for foreign-made vehicles from 20-25% to 15%. On the heels of the Chinese government’s announcement earlier this year, the response from Tesla’s customer base in the country was immediate. In Tesla’s Shanghai gallery alone, prospective buyers cleared out the store’s entire Model X 75D inventory in 24 hours after it was announced that the price of the vehicle would be reduced by $11,000 after the 15% tariffs were implemented.
While it is unfortunate to see the ongoing trade dispute between the United States and China once more affecting the prices of Tesla’s vehicles in the country, it is pertinent to note that even with hefty taxes placed on its electric cars, Tesla was fighting the good fight in China, and it was still thriving. The company, after all, established its presence and its reputation under an environment where its cars were priced far beyond its local competition.
Tesla’s story in China is one that showcases the learning curve that the California-based electric car and energy company continues to go through. Tesla began taking pre-orders for the Model S in China in August 2013. At that point in Tesla’s history, CEO Elon Musk was not even sure how much the production vehicle would cost. Deliveries were also expected to be eight months away. Anticipation among Chinese buyers, however, were high nonetheless, thanks to a combination of factors including Elon Musk’s rockstar status, as well as talks about the vehicle’s performance and supercar-worthy acceleration. Pre-orders for the Model S topped 5,000 that year.
Unfortunately, Tesla was not able to support these first Model S owners properly. Due to miscalculations on its business strategy, Tesla ended up with a lot of disgruntled Chinese owners. One Model S buyer even made national news after he smashed the windshield of his own Tesla after the car arrived months later than expected. To top it off, the Supercharger network, widely considered as Tesla’s ace in the electric car industry today, was still in its infancy then, and China only had a small system centered around key cities. Things changed, however, on January 2015, when Elon Musk flew to China and met with President Xi Jinping. Musk also admitted to Tesla’s “earlier mistakes,” stating that he was nonetheless “very optimistic” about the company’s chances in the country. Tesla also attended the Shanghai Auto Show, sparking more interest in its electric vehicles.
- Tesla’s grand opening of its Changsha, China store. [Credit: @vincent13031925/Twitter]
- Credit: Dennis Chang via Twitter
- Tesla’s grand opening of its Changsha, China store. [Credit: @vincent13031925/Twitter]
- Tesla’s grand opening of its Shenzhen, China store. [Credit: @vincent13031925/Twitter]
In the months that followed, Tesla expanded its Supercharger network, curbing the “range anxiety” of China’s electric car owners. Word-of-mouth about the company’s non-dealership sales model also started spreading. Tesla’s business in China experienced a massive boost when it introduced the Model X as well, considering the country’s obsession with SUVs. Government regulations, such as Shanghai’s electric-car friendly license plates gave even more benefits to Tesla. By the end of 2017, Tesla had already opened the largest Supercharger in the world in Shanghai. The company’s sales in the country in 2016 also helped boost its revenue enough to join the Fortune 500 list for the first time.
With Tesla’s history in mind, the renewed tariffs from the United States and China’s ongoing trade dispute could actually have little effect on Tesla’s overall operations in the country. The new duties will result in lost sales — that much is a given — but Tesla’s pedigree as a luxury automaker that makes cars that are the ultimate status symbols in China remain undaunted.

Tesla’s approval for its China site from the Central Committee of the Communist Party of China. [Credit: vincent13031925/Twitter]
Tesla, after all, has not really started its mass market push in China. The Model 3 and the Model Y, the company’s two vehicles that are targeted to dominate in the midrange segment, have not arrived in the country as of yet. With Elon Musk confirming during the Q1 2018 earnings call that the next Gigafactory will be in China, and that the facility will incorporate vehicle production, the solely-owned factory should allow Tesla to avoid the import taxes imposed on its upcoming, more budget-friendly vehicles — trade war or no trade war.
Tesla’s China Gigafactory is expected to be the site where the electric car maker will manufacture the Model Y crossover SUV, as well as some of the Model 3. Both vehicles are targeted towards the mass-market, with Tesla estimating that the Model Y could see a demand of up to 1 million vehicles per year. With the Model Y and Model 3, Tesla could compete in China not only in the luxury segment, but on the more lucrative and more competitive midrange market as well. For now, however, Tesla’s efforts to establish its own factory in China seems to be going well, with the company being granted a final approval for its solely-owned electric car facility by the Central Committee of the Communist Party of China.
Elon Musk
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.”

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.
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.
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.
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.

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.

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
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.

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.
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.
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