Dear Reader,
Good morning!
Happy Monday. Today I’d like to talk about Elon Musk’s pay package.
Elon Musk will be the first human in history to get a $1 trillion compensation package.
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Shareholders voted overwhelmingly (75%) in favor of the package.
It’s astonishing.
What I find more interesting is what they’re paying him for.
It’s not to sell electric vehicles.
When you look at the milestones he’ll be rewarded for, you can see he’s being paid to transform the company with new products…
Robotaxis, autonomous vehicles, Optimus robots.
If you dig in, you see they are paying him to move Tesla from the AI era to the EI era.
To make this money, Elon has to sell a million Optimus humanoid robots or put a million robotaxis on the road.
Either way, that’s a million self-thinking robots he’s incentivized to bring to the public.
The humanoid Optimus robot helps you around the house. A robotaxi is a robot that drives you around.
You can see how big Tesla alone believes this opportunity is: A million robots.
When you look at the filings and conversations of some of the stakeholders, they’re saying from a return on capital point of view, the highest return on capital is going to come from robotics.
Whether it’s humanoid or taxi, that’s where the highest return on capital is.
Look, it’s very hard for a new entrant to come and compete with “the big three” automakers in the U.S.
Think about DeLorean, or any company that comes in with a new car that’s really cool…
The big three just copy it, mass produce it and hit economies of scale.
It’s very difficult to bring in a new product.
There’s no way Musk would have been able to bring a gas-powered competitor to the big three.
He brought electric vehicles, which is a big deal, but clearly big carmakers have been able to roll out competitive EV offerings, and then it becomes a race to the bottom.
Look at Toyota… GM… Ford…
There are plenty of competitive EV and hybrid offerings, which is what people seem to really want in America.
It’s difficult to manufacture at scale, so it seems that both Elon and now shareholders have concluded that the best way to double, triple, quadruple Tesla’s stock price is for Tesla to become a robot company.
That is what’s coming. It’s a certainty.
So the headline here is, “Tesla Votes and Approves the Trillion-Dollar Pay Package to Turn Tesla into a Robot Manufacturer.”
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