San Francisco (Reuters) – How can Tesla become a $ 8.5 trillion company? This is the market value that the electric vehicle manufacturer would have to reach to justify CEO Elon Musk’s new salary package, announced last week.
Selling 100 million humanoid robots in a year could do this. Create a network of robotaxis more than ten times the Uber recipe could also. And of course, the investor’s hope is part of the equation.
Musk received on Friday a decade to expand Tesla’s $ 1 trillion rating to a company that would be worth more than the current combined value of Nvidia and Microsoft, the two most valuable public companies in the world. If he is successful, Musk, who is already the highest paid CEO in the world, would receive a salary package of $ 1 trillion.
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but is subject to shareholders’ approval in November.
The advice has shown how and where Tesla expects money, structuring the musk salary package around 12 goals, based mainly on products and profit, as well as market capitalization.
The company aims for huge profit increases as Tesla launches its optimus humanoid robots and a fleet of robotáxis that, according to the company, will be more efficient than human competitors.
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Much depends on how investors evaluate the company. Tesla, for example, is evaluated as a growth action, being negotiated about 75 times its profit before interest, taxes, depreciation and amortization (EBITDA), although its vehicle sales have fallen last year and probably retreat this year.
The reward for Musk is impressive – and the goals as well. Gene Munster, a managing partner of Deepwater Asset Management, generally estimated that robotáxis and autonomous steering software could be worth one trillion dollars in market value, and cars, another half trillion.
“In the end, the reason why this will work or not depends on Optimus,” he said. “It’s a fairy tale, but it can really happen.”
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Musk has been betting on autonomous steering software and robotaxis for some time. Tesla currently has a small fleet of robotáxis – estimated in about three dozen vehicles – in a region of Austin, Texas. One of Musk’s first milestones is having a million robotaxis in operation.
One of Tesla’s biggest fans, Ark Invest, predicted an even more promising scenario well before the announcement of the musk salary package. Tesla market capitalization is expected to reach $ 7 trillion to $ 10.9 trillion in 2029, with a robotaxis network generating between $ 603 billion and $ 951 billion in application transport per year. By comparison, Uber, a global application leader by application, will have a revenue of $ 52 billion this year, according to LSEG.
Tesla would start by having and operating a network of robotaxis, which would eventually be assumed by another company, predicted Ark. Tesla’s participation in the value of the race would be 40% to 60%, twice the slice of Uber, ARK said.
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Ark did not include a robot rating on its model, although it said this could become a $ 24 trillion market.
Betting on robots
More recently, Musk described robots as the future, saying that humanoid optimus could represent 80% of Tesla’s value.
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If Tesla’s future depends on Optimus, the company will have to sell many robots – perhaps more than 100 million a year, according to Reuters calculations.
If Tesla’s business were only from robots, this value of 100 million would be necessary to reach the maximum goal of EBITDA, as specified in the $ 400 billion musk salary package. The Optimus robot should be priced around $ 25,000, and current Tesla’s EBITDA profit margin is about 15%. To double the profit margin, Tesla would have to sell only half of that number of robots.
This year’s EBITDA should be $ 13 billion, according to LSEG, so Tesla has a long way to go.
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Much will also depend on how investors calculate the company’s potential at the end of a decade salary package. If investors continue to precet Tesla 75 times EBITDA, it would take $ 113 billion for Tesla to reach a $ 8.5 trillion rating, or less than the profit goal set in the musk salary package.
This package has a maximum EBITDA of $ 400 billion and a maximum market value of US $ 8.5 trillion, a multiple of 21.
The $ 400 billion goal was “materially more aggressive” than Morgan Stanley’s predictions of Tesla’s car, energy and robotaxi business, their analysts said on Sunday, adding that “it would imply substantial contributions from Optimus and other AI robots that are currently not in our forecasts.”
Some investors have been focused well on new products and said the proposed payment can help solve what is affecting the company now.
“There are major operational obstacles that Tesla needs to overcome,” said Will Rhip, CEO of Graniteshares, Global ETF broadcaster. “There are things that clearly need to be reversed, such as the fall in sales, etc. So why not link CEO’s compensation to the reversal of some of these trends?”
