Tesla 10 millionth EV milestone moves Musk pay goal halfway there

Tesla says it has built its 10 millionth EV, putting the company halfway toward a vehicle-production target tied to CEO Elon Musk’s $1 trillion compensation plan. For investors, the milestone matters because Tesla’s long-term valuation story is increasingly linked to whether it can keep scaling cars while building software, robotaxis and robots.

The company announced the production mark in a social media post early Thursday. Tesla reached 1 million vehicles built six years ago, according to TechCrunch.

Shareholders approved Musk’s $1 trillion pay package last year, TechCrunch reported. To unlock the full award by 2035, Musk must hit four core product targets: 20 million vehicles built, 10 million active subscriptions for Tesla’s “Full Self-Driving” software, 1 million “bots” delivered and 1 million robotaxis on the road.

What does Tesla's 10 millionth EV mean for Elon Musk's pay package?

The 10 millionth vehicle means Tesla is halfway to the 20 million-vehicle production goal in the pay plan. It does not, by itself, unlock the full award because the plan also includes software, robotics, robotaxi and profit hurdles.

Tesla’s production goal is the closest of the four product targets, according to TechCrunch. The company recently reported just under 1.5 million subscribers for Full Self-Driving, though TechCrunch noted it is unclear whether that figure includes free trials. Free trials would not count toward the official subscription target set by Tesla’s board, according to the report.

The other product goals appear earlier in development. TechCrunch reported that Tesla is still in the initial phases of building both robots and robotaxis.

Can Tesla reach 20 million vehicles by 2035?

Tesla has grown quickly in recent years with the Model 3 and Model Y, but TechCrunch reported that the company has not sold 2 million vehicles in a single year. If Tesla maintains that pace, or slows, TechCrunch said the 20 million-vehicle mark would not arrive until at least the early 2030s.

Musk previously said Tesla could make 20 million cars a year by 2030, according to TechCrunch, but later dropped that target as sales growth cooled.

The competitive picture is mixed. In the United States, Tesla faces less pressure from some traditional automakers after several pulled back from electric vehicles, while startups including Rivian and Lucid Motors have had difficulty reaching larger production scale, TechCrunch reported.

Tesla is still under pressure in its home market. InsideEVs reported that Tesla’s U.S. sales dropped 13% year over year in the second quarter. Tesla’s own second-quarter update pointed to newer markets including Japan, Australia and Lithuania as areas where the company sought more buyers.

The profit target is much higher than today's level

Musk also must raise Tesla’s adjusted EBITDA to $400 billion by 2035 to receive the full share package, according to TechCrunch. Adjusted EBITDA means earnings before interest, taxes, depreciation and amortization, with certain items excluded; investors use it as one way to compare operating profit, though it is not the same as net income.

TechCrunch reported that Tesla’s adjusted EBITDA is currently around $3.27 billion and has been shrinking recently. The report cited heavy discounts, the loss of saleable regulatory credits and higher spending on projects including artificial intelligence and robotics.

On the global production scoreboard, BYD is the other automaker operating at a comparable level, according to TechCrunch. The Chinese company recently passed 17 million “new energy vehicles” built and sold, with hybrids accounting for about half of that total.

This story draws on original reporting from TechCrunch.