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Tesla’s ‘leading choice’ for its Europe Gigafactory site is Germany

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In a series of tweets on Monday, Elon Musk casually stated that Tesla’s “leading choice” for the site of its Europe Gigafactory is Germany. According to Musk, the facility would probably be built somewhere on the German-French border, near the Benelux (Belgium, Netherlands, Luxembourg) countries.

A Gigafactory in Europe has been in Musk’s radar for some time now. References to the facility being built in the region were teased by Musk back in late 2016, after the company announced its acquisition of Grohmann Engineering. Grohmann Engineering, now known as Tesla Grohmann Automation, is based in Prüm, Germany, which makes it strategically located for any facility that Tesla builds near the German-French border. With the robotics company nearby, Tesla would be able to scale the manufacturing capabilities of its Europe Gigafactory with relative ease.

Several areas in Germany close to the Benelux countries actually have thriving car industries. Baden-Württemberg, for one, is home to facilities owned by legacy automakers such as AMG, Mercedes-Benz, Porsche, and Audi. Apart from being the third-largest state in Germany, Baden-Württemberg is also one of the regions in the country with the highest density of electric cars and EV charging infrastructure. Baden-Württemberg is also home to a good number of academic institutions, which could provide Tesla with a sizeable pool of potential employees.

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Overall, the prospect of the Europe Gigafactory being set up in Germany stands to benefit Tesla’s customers and other facilities in the region. With the Europe Gigafactory producing battery packs, powertrains, and vehicles, Tesla’s other facilities in the area, such as its Tilburg, Netherlands assembly plant, could increase its capability to roll out electric vehicles.

Ultimately, however, a Gigafactory in Europe would be Tesla’s ticket to saturating the region with competitively-priced vehicles such as the Model 3, and possibly even the Model Y. During Tesla’s Q1 2018 earnings call, Elon Musk noted that all future Gigafactories would be incorporating vehicle production. With its first foray into the mid-sized luxury segment — the Model 3 — already proving to be a formidable competitor in its class in the United States, an aggressive push of the vehicle in Europe could very well put a sizeable dent in the profits of the region’s legacy automakers.

Tesla’s Europe Gigafactory would likely take some time before its construction begins, however. For now, Tesla is focused on establishing the China Gigafactory. The upcoming factory, which will be wholly owned by Tesla thanks to changes in China’s rules for facilities owned by foreign automakers, is expected to be the site where the majority of the Model Y crossover SUV would be produced. Details about the upcoming all-electric crossover SUV have been dropped by Musk during the past few earnings call as well. Back in Q3 2017, Musk asserted that its China facility would not produce the Model S and Model X, but rather, the Model Y and Model 3. During the Q4 2017 call, Musk stated that Tesla would begin investing in the Model Y sometime later in 2018.

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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Elon Musk

Analyst: Elon Musk’s $1 trillion Tesla pay deal modest against robot market potential

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment.

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Credit: Tesla

Morgan Stanley analyst Adam Jonas, one of Wall Street’s most ardent Tesla (NASDAQ:TSLA) bulls today, has described Elon Musk’s newly proposed $1 trillion performance-based compensation package as a “good deal” for investors. 

In a note shared this week, Jonas argued that the package helps align the interests of Musk and Tesla’s minority shareholders, despite its shockingly high headline number.

Future market opportunities

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment. “Yes, a trillion bucks is a big number, but (it) is rather modest compared to the size of the market opportunity,” Jonas wrote. He added that the humanoid robot market could ultimately surpass the size of today’s global labor market “by a significant multiple.”

“We have entertained scenarios where the humanoid robot market can exceed the size of today’s global labor market… by a significant multiple,” Jonas wrote, as shared on X by Tesla watcher Sawyer Merritt.

The analyst likened the arrival of AI-powered robotics to the transformative effect of electricity, noting that “contemplating future global GDP before AI robots is like contemplating global GDP before electricity.” The Morgan Stanley analyst’s insights align with the idea that as much as 80% of Tesla’s future valuation could be tied to its Optimus humanoid robot program.

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Elon Musk’s pay package

Tesla’s board has tied Elon Musk’s proposed compensation package to some of the most ambitious targets in corporate history. The 2025 CEO Performance Award requires the automaker’s valuation to soar from roughly $1.1 trillion today to $8.5 trillion over the next decade, a level that would make Tesla the most valuable company in existence.

The plan also demands a leap in Tesla’s operating profit, from $17 billion in 2024 to $400 billion annually. It also ties the CEO’s compensation to a number of product milestones, including the delivery of 20 million vehicles in total, 10 million active Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million Robotaxis in operation. Tesla’s board emphasized that Musk’s leadership was fundamental to achieving such ambitious goals, with Chair Robyn Denholm noting the award would align the CEO’s incentives with long-term shareholder value.

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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.”

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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.

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.

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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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