Tesla Hits 10 Million EVs: Milestone or Stumble?

Tesla has achieved a major manufacturing milestone, having now produced its 10 millionth electric vehicle. This significant accomplishment arrives just six years after the company celebrated building its first million cars, underscoring a period of rapid expansion.

The production tally is critical for CEO Elon Musk's performance-based $1 trillion pay package. To fully realize this compensation, Musk must ensure Tesla meets several ambitious targets by 2035, including building 20 million vehicles and securing 10 million subscriptions for its "Full Self-Driving" software.

Despite a few years of intense growth, Tesla has not yet achieved the goal of selling 2 million vehicles annually. Projections suggest it may take until the early 2030s to reach the 20 million vehicle production mark if current sales paces continue or slow further.

Competition in the U.S. electric vehicle market has lessened as major automakers scale back. However, Tesla itself has faced challenges, with a 13% year-over-year decrease in U.S. sales during the second quarter. Consequently, the company has focused on cultivating demand in newer markets such as Japan, Australia, and Lithuania.

While Musk previously aimed for 20 million cars produced annually by 2030, this target was later abandoned due to sales deceleration. Among Musk's compensation goals, vehicle production remains the closest to achievement.

Tesla has reported nearly 1.5 million FSD subscribers, though clarity is needed on whether free trials are included in this figure, as they may not count towards the official product goal. The company is in the nascent stages of developing robots and robotaxis.

Musk also faces the challenge of increasing Tesla's adjusted EBITDA to $400 billion by 2035 to secure his full share package. Currently, the company's adjusted EBITDA is around $3.27 billion and has been declining due to factors like heavy discounts and increased spending on AI and robotics.

Globally, China's BYD is a notable competitor, having produced and sold over 17 million "new energy vehicles," approximately half of which were hybrids.