Electric carmaker Tesla announced record sales in Q3 2025, bouncing back after two challenging quarters. During the earnings call, Elon Musk renewed his plea for shareholders to approve his $1 trillion pay package, warning of serious consequences if they reject it. The move has sparked intense debate among investors and industry watchers about whether this is a calculated strategy to secure Musk’s leadership or a risky gamble that could backfire.
Despite the revenue boost, Tesla’s shares fell 0.8% to $438.97 at market close. Shareholders will vote on the proposal on 6 November. Several influential groups, including proxy adviser Institutional Shareholder Services (ISS), oppose the enormous payout. Musk has been advocating for a $1 trillion reward over the past two years, framing it as a key motivator for long-term growth.
Quarterly Results
For the three months ending 30 September 2025, Tesla’s revenue rose 12% to $28.1 billion compared to Q3 2024. Net income fell 37% year-over-year to $1.4 billion, while free cash flow reached nearly $4 billion. This dip in profit margins reflects broader industry pressures and increased costs.
Tesla CFO Vaibhav Taneja cited US tariffs as impacting profits, adding over $400 million in costs. Operating expenses increased 50% to $3.4 billion due to investments in AI, robotics, and R&D. Federal EV tax credits expired or were eliminated under President Trump’s spending bill, adding further hurdles.
During the quarter, Tesla produced over 447,450 vehicles, delivered a record 497,099, and deployed 12.5 GWh of energy storage. Taneja expects capital expenditure to rise significantly next year as Tesla ramps up work on new models and innovative technologies.
New Product Launches
Tesla plans several new launches that could boost its stock and market position. On 7 October 2025, it introduced the stripped-down Model Y and Model 3 Standard, with prices starting at $39,990 and $36,990 respectively. Production of the Cybertruck robotaxi, Semi truck, and Megapack 3 battery will begin in 2026, with the Optimus humanoid robot expected later this year — a move that underscores Musk’s push into robotics and AI.
Musk announced that Tesla’s self-driving Robotaxis will be operational in 8 to 10 metro areas by year-end, initially in seven states: Texas, California, Florida, Illinois, Nevada, Arizona, and Colorado. This rollout marks a significant step towards Musk’s vision of autonomous ride-hailing services.
He emphasised Tesla’s cautious approach: ‘Obviously we’re being very cautious about the deployment, because even one accident will be front-page news worldwide.’ Musk aims to have no safety drivers in most parts of Austin by the end of 2025, highlighting the company’s focus on safety and regulation compliance.
A Pivotal Decision
In September, Tesla’s board recommended the pay package, believing it would incentivise Musk and boost his involvement in day-to-day operations. Chairman Robyn Denholm told Bloomberg, ‘Musk and no one else can run the company.”
Musk claims Tesla is worth more than all other automakers combined: ‘Which of those CEOs would you like to run Tesla? It won’t be me,’ he said.
Despite internal support, ISS and public pension funds with stakes in Tesla oppose the outsized payout, raising questions about corporate governance and shareholder interests. A repeat of the 2018 battle over Musk’s $56 billion package could unfold, intensifying scrutiny of executive compensation practices.
Was this perfect timing or a strategic move by Musk? The upcoming November vote could be a decisive moment, potentially shaping Tesla’s future and influencing investor confidence in the mega-cap tech giant.
Originally published on IBTimes UK
