Tesla Inc.’s shares showed a modest rebound in premarket trading on Tuesday, climbing 0.4% after a sharp decline the previous day. This uptick comes amid growing investor scrutiny over the electric-vehicle giant’s eroding market position in the U.S., where its share of EV sales has dipped to a concerning 38%, the lowest since 2017. The dip was highlighted in a recent report from Business Insider, which noted that intensifying competition from rivals like Ford and General Motors is chipping away at Tesla’s dominance, even as the broader EV market expands.

At the heart of this volatility is Elon Musk’s proposed compensation package, a staggering plan that could reach $1 trillion if ambitious milestones are met. Tesla’s board unveiled the package last week, tying Musk’s rewards to elevating the company’s market capitalization from its current $1 trillion-plus valuation to an eye-popping $8.5 trillion over the next decade. This includes performance targets such as deploying 1 million robotaxis and delivering 20 million vehicles annually, as detailed in coverage from The New York Times.

The Ambitious Targets Behind Musk’s Pay Plan

The proposal, which would award Musk up to 423 million shares—roughly 12% of Tesla’s outstanding stock—has sparked debate among shareholders and analysts. It’s structured in 12 tranches, with unlocks starting at a $2 trillion market cap and scaling up, requiring not just financial growth but operational feats like 1 million active Full Self-Driving subscriptions and massive energy system deliveries. Reuters reported in its article at Reuters that this setup underscores Musk’s pivotal role in steering Tesla toward becoming an AI and robotics leader, beyond its core EV business.

Critics, however, question the feasibility. A Delaware judge’s prior rejection of Musk’s 2018 pay package, which was worth $56 billion, led to this even larger proposal, as explored in Business Insider‘s analysis of how legal challenges have inadvertently paved the way for outsized executive compensation. The new plan also mandates that Musk identify a successor, a clause that could complicate matters for a company so intrinsically linked to its CEO’s vision.

Market Reactions and Competitive Pressures

Investor sentiment on platforms like X reflects a mix of optimism and skepticism. Posts from prominent analysts, such as those projecting Tesla’s 2025 deliveries at around 4.8 million units with earnings per share nearing $29, echo earlier forecasts but now contend with the pay package’s high-stakes goals. Meanwhile, Tesla’s stock rally of 3.64% following the announcement, as noted in ABC Money, suggests some market enthusiasm for the bold targets, even as EV market share erodes.

Broader industry dynamics add layers of complexity. With Tesla’s U.S. EV dominance slipping amid rising competition, the company’s pivot to autonomous driving and robotics is seen as a high-risk bet. CNN Business, in its piece at CNN Business, emphasized that achieving trillionaire status for Musk hinges on these transformations, potentially reshaping corporate governance norms.

Implications for Shareholders and Governance

For industry insiders, the package raises questions about alignment between executive incentives and long-term shareholder value. The Economic Times suggested in its coverage at The Economic Times that it might function as a “ransom” to retain Musk amid his commitments to ventures like SpaceX and xAI, highlighting potential conflicts of interest.

As Tesla prepares for a shareholder vote, the outcome could influence executive pay structures across tech and automotive sectors. If approved, it might accelerate Tesla’s innovation drive, but failure to meet targets could exacerbate stock volatility. Analysts from sources like The Guardian warn that the plan’s sheer scale tests the limits of corporate ambition in an era of regulatory scrutiny.

Looking Ahead to 2025 and Beyond

By 2025, Tesla aims to solidify its position with expanded production in China and new models like the Cybertruck, but the pay package’s decade-long horizon demands sustained growth. CBS News reported at CBS News that milestones include $400 billion in adjusted EBITDA, underscoring the financial ambition. For now, the slight stock recovery signals cautious optimism, but the road to $8.5 trillion remains fraught with competitive and operational hurdles.