Tesla’s Bold Bet: Musk’s AI Vision and Compensation Battle Take Center Stage in Q3 Earnings

Autonomous Driving Ambitions and AI Leadership Claims

Elon Musk opened Tesla’s third-quarter earnings call with a bold declaration about the company’s position in artificial intelligence. “We’re at a critical inflection point for Tesla and our strategy going forward as we bring AI into the real world,” Musk stated during his opening remarks. The CEO expressed 100% confidence that Tesla will solve unsupervised full self-driving at a safety level surpassing human capability, positioning this technology as central to Tesla’s future.

Musk revealed ambitious timelines for Tesla’s autonomous vehicle deployment, estimating that robotaxis in large parts of Austin would operate without safety drivers by year’s end. The company plans to expand this service to eight to ten metropolitan areas by December, including Nevada, Florida, and Arizona. According to Musk, billions of Tesla vehicles already on the road possess the hardware capability to become fully autonomous through software updates alone., as comprehensive coverage

Compensation Controversy and Corporate Governance Clash

The earnings call featured fiery exchanges regarding Musk’s proposed $1 trillion compensation package, with the CEO directing particularly harsh criticism toward proxy advisory firms ISS and Glass Lewis. Musk described these firms as “corporate terrorists” and accused them of making recommendations that would have been “extremely destructive to the future of the company” if followed.

Tesla CFO Vaibhav Taneja concluded the call by directly urging shareholders to approve the new compensation package during the November 6 vote. The proposed package, which replaces Musk’s $55 billion 2018 compensation struck down by a Delaware judge earlier this year, requires the CEO to hit specific milestones over a 10-year period involving vehicle production, robotaxi deployment, and robot delivery targets., according to according to reports

Record Revenue Amid Profitability Challenges

Tesla reported mixed financial results for the quarter, with revenue reaching an all-time high of $24.3 billion, exceeding analyst expectations. This achievement came despite the company delivering a record number of vehicles during the period. However, Tesla missed Wall Street projections for both profits and adjusted earnings per share, causing shares to decline approximately 4.5% in after-hours trading following the earnings announcement.

The company attributed its profitability challenges to multiple factors, including higher average vehicle costs and significant tariff impacts exceeding $400 million for the quarter. Tesla noted in its earnings release that it faces “near-term uncertainty from shifting trade, tariff, and fiscal policy,” particularly affecting its energy storage business.

Optimus Development: Technical Hurdles and Production Goals

Musk provided detailed updates on Tesla’s humanoid robot project, announcing plans to debut an Optimus prototype in February or March of 2026. The CEO described the upcoming iteration as so advanced that “it won’t even seem like a robot; it will seem like a person in a robot suit.” However, he acknowledged significant technical challenges, particularly in developing human-like robotic hands, which he called a “difficult engineering challenge.”

The development team faces substantial obstacles, with engineers working through lengthy meetings on Fridays and Saturdays to solve technical and logistical problems. Musk highlighted the absence of an established supply chain for humanoid robots as a major production hurdle, contrasting it with the mature supply chains available for automobiles and computers. Despite these challenges, Tesla plans to establish a production line capable of manufacturing one million Optimus units by the end of 2026.

AI Chip Strategy and Manufacturing Partnerships

Tesla is advancing its autonomous driving capabilities through strategic partnerships with semiconductor giants Samsung and Taiwan Semiconductor Manufacturing Company (TSMC). The company revealed a $16.5 billion agreement with Samsung, utilizing the South Korean company’s new manufacturing facility in Taylor, Texas. TSMC, Tesla’s long-standing partner, will contribute to chip production through its Arizona plant.

Musk emphasized that the next-generation AI5 self-driving chips will represent a 40-fold improvement over current AI4 technology, attributing this advancement to Tesla’s tight integration of hardware and software development. The CEO stated that Tesla’s “explicit goal is to have an oversupply of AI5 chips,” indicating the company’s commitment to securing sufficient computing power for its autonomous driving ambitions.

As Tesla navigates these multiple fronts—from autonomous driving development to humanoid robotics and semiconductor production—the company faces both unprecedented opportunities and significant challenges in executing its ambitious vision for the future of transportation and artificial intelligence.

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