Production and delivery of vehicles from Tesla, Elon Musk’s electric car company, are closely watched by investors and any Tesla customers waiting for their new, coveted car.
Production of the cars hit a milestone earlier this year and largely went unnoticed until this week: Tesla has produced its 300,000th vehicle. While the company doesn’t officially publicize the number of vehicles it produces and delivers until after the end of each quarter, when Musk’s ten-year compensation plan was announced in late January, buried in a document for shareholders about the bonus structure was the news — if you’ve been following Tesla closely.
In 2012, Tesla created a bonus structure that required he hit ten “operational milestones” related to developing more Tesla products. When the company announced his new compensation plan last month, it declared that “all but one of the operational milestones have now been achieved.”
A look at Tesla’s quarterly gross margins (total sales minus cost) shows that it hasn’t hit 30 percent four quarters in a row, which was one of the ten milestones. With that as the milestone not hit, another ambitious one — produce 300,000 vehicles — has been cleared. Below’s that 2012 list:
Musk's operational milestones given to him by Tesla in 2012. The company hit all of them save for 30 percent gross margin for a year straight.
The new 2018 performance award for Musk — which means he will likely remain CEO of Tesla until 2028 — doesn’t include production figures in its operational milestones; instead they are focused on total revenue and earnings before interest, taxes, depreciation, and amortization.
The passage of that 300,000-vehicle milestone flew under the radar when Musk’s new performance bonus was announced in last month’s preliminary proposal, but the definitive proposal was sent to shareholders a week ago and was noticed by Electrek. The site also did the math to note that by the end of December 2017, Tesla had produced and delivered 286,000 vehicles.
What’s Next
Of course, Musk’s 2018 performance award is subject to the approval of Tesla stockholders, who will convene on March 21 a one-agenda item meeting to vote on his compensation plan. Perhaps Tesla will tout the milestone at that meeting or during its first-quarter financial report, which is typically in early May.
