Tesla has granted Elon Musk an astonishing 96 million shares worth approximately $29 billion in an effort to keep him as CEO while he fights a court ruling that voided his previous compensation package from 2018.

The newly approved plan, filed by Tesla’s board, closely mirrors the original agreement, which a Delaware judge struck down, claiming the board’s process was flawed due to a lack of independence — the directors were reportedly too close to Musk. In March, Elon appealed the decision, arguing the judge made serious legal errors.


Musk Must Invest His Own Money First

To claim the stock grant, Musk must pay $23.34 per share — the same strike price as the 2018 package. This means he’d have to spend billions of dollars from his own funds to receive the full award.

The new stock plan is also structured to gradually increase Musk’s voting power, reinforcing his ability to focus on Tesla’s long-term goals. Currently, he holds about 13% of Tesla, and this award could further strengthen his influence without having to buy shares on the open market.

Tesla’s board defended the move: “While we recognize Elon’s business interests and demands on his time are vast… we believe this award motivates him to remain committed to Tesla.” Investors, the board claims, see Musk’s leadership as essential to the company’s future.


Tesla Shifts Strategy Toward AI and Robotics

Tesla is pivoting away from the idea of making low-cost electric vehicles, instead focusing on robotaxis and humanoid robots. The company is now positioning itself more as a robotics and AI platform than a traditional carmaker. Musk’s vision is seen as vital as Tesla enters uncharted product territory.

News of the new compensation package lifted Tesla’s stock by more than 2% in premarket trading.


Sales Slump in China Amid Growing Competition

At the same time, Tesla is facing headwinds in China. In July, its Shanghai factory delivered just 67,886 vehicles — an 8.4% drop compared to the same month last year. Out of the first seven months of 2025, six have shown declining delivery figures.

The drop is largely due to fierce competition from domestic rivals like BYD and Xiaomi. Xiaomi’s new YU7 SUV is directly challenging Tesla’s Model Y and gaining attention. Tesla’s product range in China remains narrow, and the company has struggled to compete. To counter this, Tesla is preparing to launch a six-seat version of the Model Y aimed at attracting families.

Meanwhile, the broader Chinese EV market is booming. EV and hybrid sales rose 25% in July to 1.18 million units — an unusual surge for a seasonally slow month. Tesla’s shrinking market share in this rapidly growing space raises red flags.

And it’s not just China. Globally, Tesla is facing declining demand, in part due to Musk’s political statements and public persona, which have alienated some consumers in Europe and the U.S. The company’s Q2 earnings results confirmed this waning interest.


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