The South African billionaire took charge of the Department of Government Efficiency (DOGE), a body created with the sole purpose of cutting expenses and reorganizing the federal bureaucracy.
This department closed last November. Previously, in May, Musk left the Trump Administration after criticizing the Republican budget proposal.
But The problems at Tesla began months before. Specifically, in the first quarter of the year.
A situation that is explained by a slowdown in the electric vehicle market, greater competition, as well as operational factors, including the renewal of its reduced range of vehicles.
In 2024, Tesla recorded its first global sales decline in more than a decade. In fact, Elon Musk stated at the end of that year that Tesla’s forecasts were to increase sales between 20% and 30%.
To put things in context, Tesla accumulates four consecutive years in which it has not met its sales forecasts. It did not do it in 2022, nor in 2023, nor even in 2024. And, of course, it will not meet its forecasts in 2025 either.
Historical bonus
All of this did not prevent the shareholders of the North American company from deciding to reward its founder and CEO with a record bonus.
In total, Elon Musk will receive one trillion dollars – yes, trillion with a ‘b’ – if he meets a series of objectives until 2035.
Specifically, 75% of Tesla shareholders approved said share package. Institutional investors such as Norges BankNorway’s sovereign wealth fund.
“While we recognize the significant value generated under Mr. Musk’s visionary leadership, we are concerned about the total amount of the bonus, the dilution of the shareholding and the failure to mitigate the risk associated with the role of the CEO, consistent with our position on executive compensation,” according to the explanation of the voting direction made by Norges Bank.
It is worth remembering that Norges Bank Investment Management holds a 1.12% stake in Teslawhich is equivalent to 37.27 million shares of the electric car company.
Previously, in June, the Swedish pension fund AP7 divested all of the company’s shares. However, said fund fled before Musk proposed his billion-dollar bonus. And he did it due to Musk’s failure to comply with labor rights in the United States.
‘Overtaking’ by BYD
The situation is so delicate that Tesla will no longer be the company with the most sales of electric vehicles in the world. Its place will be taken by the Chinese BYD.
A situation that is explained by its continuous entry into various markets around the world. In the first nine months of the year, BYD sold 3,260,146 electrified vehicles (electric and plug-in hybrids), which is equivalent to an increase of 18.6% in the year-on-year comparison.
Of this amount, 1,605,903 units corresponded to completely electric passenger cars, which represents an increase of 37.1% compared to the same period of the previous year and 49.2% of deliveries.
Tesla, for its part, sold a total of 1,247,902 electric vehicles in the first nine months of the year, which is equivalent to a decrease of 3.5% in the year-on-year comparison.
Problem in Europe
The truth is that Tesla is accumulating problems in the three main vehicle sales regions: the United States, China and, above all, Europe.
The Old Continent has turned its back on the American company. And it is not something that attracts attention if you take into account the constant fuss made by Elon Musk throughout the year.
At the beginning of the year, and in the middle of the German federal election campaign, Musk asked to vote for the far-right party AfD (Alternative for Germany).
In fact, the businessman recently said that “the EU should be abolished and sovereignty returned to individual countriesso that governments can better represent their people.
All this after the European Commission imposed a fine of 120 million euros on X for violating transparency rules and obligations of the Digital Services Regulation.
In Germany, where Tesla has a gigafactory, the company’s sales between January and November accumulated a decrease of 48.4% compared to the same period of the previous year, to 17,358 units.
Spain is one of the few community markets in which the firm’s registrations are increasing. The reason? Tesla maintains a discount program for certain models and versions from July 2024.
This situation allows the company to increase its sales. But It also passes on to its clients the problems arising from the loss of residual value. of their vehicles.
The truth is that the company has an excessively short range of models, which harms it compared to a competition that has a wide variety of vehicles.
Between January and November – latest data available – Tesla sales in the Old Continent accumulated a decrease of 28% in an interannual rate, with a total of 203,382 units sold.
Company transformation
If anyone thought that Tesla was going to focus on the automobile industry, they are wrong. The firm is in an unprecedented transformation process.
“Tesla’s next chapter has the potential to create a world we have only begun to imagine: reinventing work, transportation and energy, and integrating AI into the physical world through products and services to create a safer, cleaner and more enjoyable world for everyone,” the company said in a letter sent to shareholders to approve Elon Musk’s billion-dollar bonus.
Among the objectives stands out the ambition to achieve a $8.5 trillion market value for Tesla in the next decade. Currently, the company’s capitalization stands at 1.4 billion dollars.
Not only that. The South African tycoon also contemplates the production of 20 million vehicles until 2035. To put these figures in context, since Tesla began production back in 2008, it has manufactured 7.9 million units.
This would imply producing 2 million vehicles per year, a figure slightly higher than in recent years. Thus, in 2024 it manufactured 1.77 million units.
Another of the objectives to be met in exchange for the one billion dollar bonus is the development and massive deployment of fleets of robotaxis and autonomous driving products. In fact, contemplate 10 million active subscriptions to the autonomous driving system.
But there are also other milestones linked to the commercial deployment of humanoid robots. By 2035, Musk’s goal is to have at least one million units of the Optimus robot in operation.
In fact, robots are expected to be the core of Tesla’s business, surpassing the turnover of the automotive sector.
Profit plummets
In the first three quarters of the year, the The company’s profit fell 40.4% year-on-yearreaching 2,954 million dollars (2,515 million euros). The same thing happened with income, which decreased by 4.8%, to 69,926 million dollars (59,522 million euros).
The drop in profitability is also explained by the increase in operating expensesas well as due to lower income derived from regulatory credits.
However, only Elon Musk knows the future of Tesla. Now, we will have to wait for the company to meet some of its forecasts. If this ever occurs.