I suspect I hold a minority opinion - but I think Tesla is woefully overvalued for what it is, and what it sells - yes, it has interesting new technology, but I have doubts about its ability to execute at the scale required to dominate the market as they wish.<p>Tesla has a market cap of 56 billion dollars - compared to Ford at 45 billion, and GM at 61 billion.<p>Tesla I believe sold around 100,000 cars in 2017, and 76,000 in 2016, in the US alone Ford and GM sold 2.5 and 3 million respectively in 2016 - to give you scale GM sold 10 million worldwide (again, in 2016).<p>Scaling manufacturing operations is one of the hardest things to do - so I dont see it to be possible for Tesla to chase after the mass market, or do anywhere near the sales of the other manufacturers.
This is. win-win for Elon. He’s already a billionaire so salary doesn’t move the needle. At the same time it sends a message of confidence to investors. If his net worth was $5m would he make the same bet?
As someone in a similar situation, at much lower numbers, I can say this is likely primarily about tax optimization, with the optics being a nice side benefit.<p>If you're fairly liquid and decently bullish on your company, then holding off and taking your income later as capital gains makes a lot of sense. And as seen in the article, he can borrow against the shares to achieve as much liquidity as he wants/needs for his lifestyle without having to pay ordinary income taxes.<p>I guess I'm impressed by Elon that he can get such puff from the NYT for some basic tax structuring.
Tesla is not a car company. Here are some other markets they are in:<p>* Energy storage. See the giant battery in Australia.<p>* Residential solar and solar roof tiles. See Gigafactory 2 in Buffalo New York.<p>* Electric vehicle charging. See the supercharger network.<p>* Battery cell production. See Gigafactory 1 in Nevada.<p>They have also said they are exploring:<p>* Launching a ride sharing service using autonomous cars.<p>* Capitalzing on the supercharger network with retail and food.<p>* Moving into trucking and logistics with the semi project.<p>This is why people invest in Tesla.
The interesting part is how this contradicts what Elon's original stated goal of the company was.<p>I am a Musk believer, and when he started Tesla he stated his goal wasn't to be a major car manufacturer but to be a proof of concept to push the major players into the space. He demonstrated this by the open sourcing of EV patents.<p>Tying compensation to cap value of Tesla means that he no longer believes the major players will adapt (although there is strong evidence that his original plan has worked and the other manufacturers are making much larger investments in EV), or that the auto's segment will grow as a whole so significantly, that Telsa, as a minority player, will still be able to reach a 10x size over the next decade.
>If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion<p>Except that as the article says, he already owns 20% of Tesla, so his current shares would rise in value by $110B. He could fail to meet any of performance targets and still be pulling in a billion dollars a year in capital gains.
Bold would be if he would donate his entire net worth if Tesla fails to meet goals. This is not bold because he would still be a billionaire if Tesla failed.