Tesla has handed Elon Musk 96 million shares worth around $29 billion in an attempt to hold onto him as CEO while he pushes back against a court ruling that canceled his previous compensation package.
The new award, approved by the board and disclosed in a filing, is nearly identical in structure to the 2018 deal that a Delaware judge threw out in 2024 for being unfair to shareholders. The court said the board’s process at the time was flawed, with board members too close to Musk to act independently.
According to Bloomberg, Elon filed an appeal in March. He argued the judge made serious legal mistakes when tossing out his earlier pay deal. While that fight plays out, the Tesla board isn’t wasting time.
Tesla links Elon Musk’s shares to new voting control
The board’s special committee said in the filing, “While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging … we are confident that this award will incentivize Elon to remain at Tesla.”
The 96 million shares won’t be handed over immediately. Elon must pay $23.34 per share to get the stock to vest, matching the same exercise price from the 2018 award. That would require him to spend billions of dollars from his own pocket if he wants to unlock the full grant.
This new stock package is also structured to gradually give Elon more voting power. Both he and other shareholders have argued that increasing his control is necessary to keep him focused on Tesla’s long-term goals.
The committee confirmed this again in the same filing, saying the award is built around that specific purpose. Elon currently owns about 13% of Tesla, and this new award could help him increase his grip on the company without having to buy stock on the open market.
Tesla’s business strategy is also changing. Elon is now ditching the plan for a low-cost electric vehicle and turning the company’s attention to robotaxis and humanoid robots. The company has already started calling itself more of a robotics and AI platform than a traditional carmaker, which makes Elon’s presence even more critical, according to the board, especially as Tesla heads into uncharted product categories.
The company’s stock climbed more than 2% in premarket trading after news of the new compensation hit the market.
Tesla struggles in China while Musk’s politics hit global demand
Tesla’s sales numbers in China continue to slide. In July 2025, the Shanghai plant shipped 67,886 units, which is an 8.4% drop compared to the same month a year earlier. The data came from the China Passenger Car Association.
They didn’t split the numbers between domestic sales and exports, but the trend has been bad for most of the year. Out of the seven months that have reported data so far, six have shown a drop in shipments from that plant.
The decline is tied to heavier competition from local Chinese rivals like BYD and Xiaomi. Xiaomi’s new YU7 SUV is directly competing with Tesla’s Model Y and is already grabbing attention in the market. Tesla’s lineup in China is limited, and it’s struggling to keep up. In response, Tesla is preparing to release a new six-seat version of the Model Y, hoping to attract family buyers and regain some ground.
Meanwhile, the rest of the EV market in China is booming. EV and hybrid sales jumped 25% in July to 1.18 million units. That kind of growth is unusual for midyear, which is usually a slow period for car sales. Tesla’s share of that growing market is shrinking fast, and there’s no sign yet that a turnaround is coming.
The company’s problems aren’t limited to China. Globally, Tesla is dealing with softer demand. Elon’s political activity and public statements are turning off buyers in Europe and the United States. Consumers are walking away from the brand, and the Q2 earnings numbers showed it.
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