Musk thanks Tesla faithful for his pay deal by spinning a tale of trillion-dollar robots

Elon Musk responded in kind to Tesla Inc. investors reapproving his massive compensation plan, offering outlandish predictions that he can enrich shareholders all over again.

After Tesla’s general counsel confirmed Thursday that investors supported awarding stock options to Musk worth as much as $55.8 billion, the chief executive officer said the company’s robot-making effort may one day dwarf its car business.

Tesla has all of two humanoid robot prototypes plucking battery cells off the end of a production line in California and placing them in shipping containers. “Quite a few” others are cruising around the company’s offices in Palo Alto, Musk said during the company’s annual meeting.

The CEO isn’t expecting the bot — called Optimus — to go into limited production until next year, when Tesla could put a few thousand to the test in its own factories. He nevertheless offered a pie-in-the-sky projection that Tesla may one day make around $1 trillion of profit annually from the product, without offering a time frame.

“If the price-to-earnings multiple is, say, I don’t know, 20 or 25, something like that, that would mean a $20 trillion market cap from Optimus alone,” Musk said. “It’s within the realm of possibility for Tesla to achieve a valuation 10-times that of the most valuable company today.”

Work on robots was at the center of an ultimatum Musk laid down earlier this year. The CEO openly pressured Tesla’s board to boost his stake in the company to around 25%, saying that he otherwise preferred to build artificial intelligence and robotics products elsewhere.

Musk has a long track record of setting stretch goals, and a spotty history of achieving them on time — if at all. While he was proven correct, for example, when he said in 2019 that the pursuit of self-driving technology could one day make Tesla a half-trillion-dollar company, his repeated predictions that Tesla is on the verge of turning its customers’ cars into robotaxis haven’t panned out.

This also isn’t the first business within Tesla that Musk has predicted will one day rival carmaking. The company continues to generate only a fraction of sales with its energy generation and storage products, years after the CEO said it could be roughly the same size as Tesla’s automotive operations.

Speaking of the auto business, Musk was much more measured.

“It’s tough sledding out there,” he said, noting that General Motors Co., Ford Motor Co. and other manufacturers have dialed back plans for electric vehicle production. “Now Tesla, we’re gonna increase, but it is not an easy market.”