Summary:

Tesla is about to announce what is says will be one of the best quarters in the company’s history, reaching profitability for the first time. But Tesla’s ambitions are much higher than its current $6.4 billion marketcap.

Tesla Model S

The stock of electric car maker Tesla Motors hit an all time high of over $60 per share this week. Partly that’s because later this afternoon the company, led by entrepreneur Elon Musk, plans to announce what it says will be its first profitable quarterly earnings in Tesla’s history . While Tesla is enjoying the brightest time in its decade-old lifetime, Musk, and the company’s board, actually have far grander ambitions than the current already impressive $6.4 billion marketcap.

According to documents prepared for Tesla’s upcoming annual meeting, Musk has an equity and stock grant package — called “2012 CEO Grant” — which was granted last summer, and which would deliver him another 5 percent of Tesla’s total shares if Tesla meets certain milestones and certain marketcaps. Musk is already a fabulously wealthy person, but it’s the operational company milestones, and accompanying soaring marketcap, which underscore Tesla’s ambitions.

Tesla Model S

The first tranche of the grant becomes available if Tesla’s marketcap hits $7.2 billion, and one of its operational goals is met. The remaining parts of the grant become available for every $4 billion added to the marketcap, along with an additional operational milestone, until the market cap reaches $43.2 billion and all ten of the operational milestones are met (see the milestones below).

As of April, when the documents were filed for the annual meeting, none of the milestones had yet been met, and Ford and GM had marketcaps of $53 billion and $40 billion respectively. For comparison’s sake, Apple — which Tesla has often times been compared to in its approach, brand and leader — has a marketcap of $430.52 billion.

  • Successful completion of the Model X Engineering Prototype (Alpha)
  • Successful completion of the Model X Vehicle Prototype (Beta)
  • Completion of the first Model X Production Vehicle
  • Successful completion of the Gen III Engineering Prototype (Alpha)
  • Successful completion of the Gen III Vehicle Prototype (Beta)
  • Completion of the first Gen III Production Vehicle
  • Gross margin of 30 percent or more for four consecutive quarters
  • Aggregate vehicle production of 100,000 vehicles
  • Aggregate vehicle production of 200,000 vehicles
  • Aggregate vehicle production of 300,000 vehicles

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