The answer to Elon Musk's battle of fate will be revealed in five days.

A trillion-dollar gamble is unfolding at Tesla.

On October 27, Tesla Chairman Robin Denholm warned in a letter to shareholders that if CEO Elon Musk's ten-year compensation plan worth up to $1 trillion is not approved, Musk may choose to leave the company.

The trigger for this event was the ten-year incentive plan tailored for Musk, which was announced by the Tesla board of directors on September 5.

According to the plan, Musk needs to achieve all 12 performance targets in the next ten years, including driving Tesla's market value to $8.5 trillion, selling 12 million electric vehicles, mass-producing 1 million artificial intelligence robots, operating 1 million autonomous taxis, and increasing the company's adjusted earnings to $400 billion. If the targets are achieved, Musk will receive stock rewards worth up to $1 trillion. Conversely, if any of the targets are not met, he will get nothing. The plan will be submitted to the shareholders' meeting for a vote on November 6.

Source: China Pictorial Library

However, this compensation proposal was jointly rejected by institutional shareholder service companies ISS and Glass Lewis. They called on investors to vote against it, stating that the plan is too large in scale and lacks an effective restraint mechanism.

In response to the opposition, Musk fought back through posts on X and other means. He also responded fiercely during Tesla's recent Q3 earnings conference call, saying that he couldn't believe that after building an army of robots, he might be ousted because of the stupid advice from ISS and Glass Lewis.

However, even if the compensation plan is approved by the shareholders' meeting, Musk will face huge real-world challenges in achieving all the performance targets in the next ten years.

How will this battle for Musk's fate end?

Behind the revenue growth, profits are under continuous pressure 

On October 23, Tesla released its Q3 2025 earnings report. Total revenue increased by 12% year-on-year to $28.1 billion, mainly due to a record high in vehicle deliveries, reaching 497,000 units, a 7% year-on-year increase. Meanwhile, the energy business also grew rapidly, with revenue soaring by 44% year-on-year.

Tesla's core automotive business achieved revenue of $21.2 billion in Q3, a 6% year-on-year increase. Its performance in the Chinese market was particularly outstanding, with sales reaching 169,000 units, a significant 31% increase from the previous quarter.

In sharp contrast to the revenue growth, Tesla's net profit attributable to shareholders in Q3 was $1.37 billion, a 37% decrease compared to $2.17 billion in the same period last year.

According to Tesla's official explanation, there are several reasons for the profit decline: increased sales and operating expenses, continuous investment in AI and other R & D projects, reduced allocation of fixed costs for some models, rising tariffs, and an increase in the average vehicle cost due to changes in the sales structure.

Specifically, Tesla's operating expenses, including sales, general and administrative expenses, as well as expenses for AI and other R & D projects, increased significantly by 50% year-on-year to $3.43 billion.

While the operating costs increased, the gross profit of Tesla's main automotive business also decreased. The earnings report shows that the deliveries of Tesla's Model 3 and Model Y in Q3 were 481,000 units, a 9% year-on-year increase. However, these two models have been discounted multiple times globally, and the "trading volume for price" strategy has further eroded the gross profit margin. The total deliveries of other models such as Model S, Model X, and Cybertruck were less than 16,000 units, making a negligible contribution to the overall revenue.

It's worth noting that Tesla saw a surge in deliveries in the US market in Q3, mainly because the $7,500 federal electric vehicle tax credit policy was set to expire at the end of September. This stimulated local consumers to make concentrated purchases, creating a "rush to buy" wave and pushing up the Q3 delivery volume in the short term. As the subsidy fades, Tesla's sales in Q4 may decline.

While Tesla is facing challenges of profit decline and sustainable growth, the competitive landscape of the global new energy vehicle market is being reshaped at an accelerating pace. BYD's total sales of new energy vehicles in Q3 2025 exceeded 1.1 million units, with sales of pure - electric models reaching 583,000 units. This is also the fourth consecutive quarter since Q4 2024 that BYD has led Tesla in pure - electric vehicle sales.

In addition, as an important source of Tesla's profits in the past, the revenue from regulatory credits for the automotive business has also shrunk significantly, dropping by 44% year-on-year to $417 million.

Despite facing many challenges, Tesla still maintains a strong cash flow. At the end of Q3, Tesla had cash, cash equivalents, and investments of $41.65 billion, a 13% increase from the previous quarter. The operating cash flow in Q3 reached $6.24 billion, basically flat compared to the same period last year; the free cash flow was $3.99 billion, a 46% year-on-year increase. The sufficient cash flow provides a solid financial foundation for its continuous investment in R & D, expansion of global production capacity, and response to market fluctuations.

Future bets and real - world challenges 

In the eyes of the outside world, Tesla has long surpassed the positioning of a traditional automaker and become a technology - driven technology company. Its market value exceeding $1 trillion also confirms the market's recognition of this identity.

During this earnings conference call, Musk didn't focus on the automotive business but on artificial intelligence, Robotaxi (driverless taxis), and the humanoid robot Optimus. He emphasized that the company is at a "critical turning point" in applying artificial intelligence technology, but at the same time, he also lowered the near - term advancement goals for Optimus and Robotaxi.

In terms of autonomous driving, Musk announced that by the end of 2025, Tesla will remove the safety drivers from Robotaxi vehicles in some areas of Austin and expand the service to 8 - 10 cities. This plan is significantly scaled back compared to the previous goal of "covering 50% of the US population". In addition, the Cybercab, designed specifically for full - self - driving without a steering wheel and pedals, is expected to start production in Q2 2026.

Regarding Optimus, Musk admitted that the hands and forearms of the humanoid robot still face complex engineering challenges. Therefore, the mass - production plan for Optimus has been postponed repeatedly, from the initially set 2024 to after 2025, and now it has been adjusted to the end of 2026. Musk also said that the maximum annual production capacity in the future will be 1 million units.

Source: Screenshot of Tesla Optimus' social media account

In Musk's view, different from industries with mature supply chains such as the automotive and computer industries, the humanoid robot currently lacks a complete supply chain system. Therefore, to achieve the goal of producing 1 million Optimus robots annually, the manufacturing process faces huge challenges. Musk's proposed solution is vertical integration, delving deep into the supply chain manufacturing process, and independently designing and producing key components.

Regarding this, some industry insiders also raised doubts in an interview with "China Entrepreneur". The insider believes that humanoid robots, especially their core component "the dexterous hand", are unlikely to become a real hot topic in the short term. The more promising direction currently is actually "embodied intelligence". The reason why humanoid robots have received wide attention is largely due to the halo effect brought by Musk's success in the rocket - building and car - building fields, which makes the public think that he also has the ability to conquer this field. However, the key difference is that building cars and rockets is essentially an engineering problem, while the R & D of humanoid robots and dexterous hands involves a large number of scientific problems that have not been solved. Simply put, problems that can be solved in a relatively short time by investing capital and manpower are engineering problems; those that cannot be predicted when they will be solved even with huge investment are scientific problems.

Tesla proposed a mass - production plan for humanoid robots as early as 2023. In fact, there are still many scientific challenges to be solved for the dexterous hand, such as material performance and sensor lifespan. Currently, the average lifespan of the sensors used in the dexterous hand is only between 100,000 and 300,000 times. In actual non - impact situations, they need to be replaced about once a month. Due to the insufficient strength of the current materials, and the tiny parts and fragile structure of the dexterous hand, it simply cannot withstand collisions during experiments and applications. This goes beyond the scope of engineering optimization and is essentially a scientific problem in fields such as materials science.

The above - mentioned industry insider's judgment is that since Tesla has failed to achieve mass production in the past four years, it is also unlikely to reach the scale production level in 2026.

If the above prediction is accurate, Tesla may face pressure from investors. On October 23, when Musk announced the postponement of Optimus' mass - production time, it triggered market concerns. After the earnings report was released, Tesla's stock price fell by more than 4% in after - hours trading.

In response to the doubts about his compensation plan, Musk further emphasized that he is not simply pursuing higher economic returns but hopes to obtain more voting control to enhance his influence on the company's strategic direction, especially in the AI and robotics businesses, so as to ensure that these key businesses can be firmly advanced according to his long - term vision.

This statement also echoes the challenges that Tesla has recently encountered in the Optimus humanoid robot project.

In fact, Tesla has fully bet its future on autonomous vehicles and humanoid robots. However, whether it is selling 12 million electric vehicles, mass - producing 1 million artificial intelligence robots, or pushing Tesla's market value to $8.5 trillion, each of these goals means unprecedented challenges in the next ten years, and the real - world path is still full of uncertainties.

This article is from the WeChat public account "China Entrepreneur Magazine" (ID: iceo - com - cn), author: Kong Yuexin, published by 36Kr with authorization.