- Elon Musk knows his people back him.
- Tesla shareholders voted in favor of his huge pay package on Thursday.
- He'll now have to prove Tesla is his top priority if he wants them to keep backing him.
The people have given Elon Musk what he wants. They'll now expect him to return the favor.
On Thursday, the billionaire jumped for joy at Tesla's annual meeting in Austin as the outcome of a high-stakes, long-anticipated vote went entirely in his favor — thanks to his people.
Not only did Musk get shareholder approval for his huge pay package — a compensation deal agreed on by Tesla's board in 2018 that was voided by a Delaware court judge in January — but he also won approval to reincorporate the company in Texas.
"Hot damn, I love you guys!" was Musk's message to a crowd of buzzing retail investors who earned the opportunity to see the electric vehicle boss up close in person through a random draw.
Hours later, he showed his gratitude to shareholders again by posting a picture to X of a cake with the words "Vox Populi, Vox Dei" written on it. The Latin phrase roughly translates to "the voice of the people is the voice of God."
Though Musk still has to fight the Delaware court to reverse the decision on his pay package — and faced sharp criticisms over his pay from top shareholders, including Norway's sovereign wealth fund — he'll be aware that the majority vote in favor of it is a vote of confidence from his people in his leadership, too.
He'd be wise not to take that for granted, however. Musk's leadership of Tesla has been built on wildly ambitious promises that his backers will now expect him to deliver on.
Doing that will mean making Tesla his top priority.
Big promises
Among the biggest promises Musk has made to Tesla fans is a revolutionary step forward in autonomous driving.
Earlier this year, he fueled huge anticipation on that front among the Tesla base by getting them to mark August 8 in their calendars as the date that he'll be ready to reveal the company's first robotaxi.
For years, the Tesla chief has teased a full-self-driving (FSD) car, suggesting in 2021 that "the day FSD goes to wide release will be one of the biggest asset value increases in history."
Shareholders and fanboys will expect him to deliver, with expectations high.
In a research note on Thursday, analysts at Wedbush wrote that with "the next chapter in the Tesla growth story around autonomous and FSD" on the horizon, the company's valuation could surge past $1 trillion in 2025.
Musk thinks FSD could take Tesla a whole lot further. During Thursday's shareholder meeting, the Tesla chief made the audacious claim that Tesla could reach a $30 trillion market capitalization in the future, factoring in its future robotics and AI plans.
Tesla is now worth around $582 billion. Its market capitalization peaked at about $1.2 trillion in November 2021. Musk has given himself a huge gulf to cross.
That's especially so as autonomous driving has proven a difficult technological challenge to crack for the automotive industry at a global scale, so there's no guarantee FSD will help Musk reach his destination.
Stretched responsibilities
Wall Street might prefer it if he focused on worrying trends that have emerged in Tesla vehicle deliveries recently.
Musk, who once promised that Tesla could sell 20 million cars a year by 2030, has faced criticism over his stretched responsibilities across companies including X, SpaceX and xAI at a time when Tesla sales have shown signs of weakness.
In April, Tesla revealed that it had sold around 386,000 cars in the first quarter of 2024, marking a 20% drop from the preceding three months.
If Musk is serious about turning that around, he'll need to get focused and prove to Tesla fans that his plans around AI, robotics and more will all help reignite demand for his vehicles.
They'll be banking on it.