Tesla stock climbs 5% despite possible Musk exit over $1T pay plan

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Tesla stock climbs

Highlights

- Tesla shares rose 5% to $455.68 despite uncertainty surrounding Elon Musk’s $1 trillion pay package.

- The board warned that Musk may leave the company if shareholders reject the plan.

- Investor concerns are growing over governance risks and potential leadership instability.

Tesla is currently trading below its 50-day moving average, which is acting as near-term resistance, while still comfortably above its 200-day moving average, currently around $420. This structure suggests a medium-term uptrend may still be intact, but short-term momentum remains weak. A sustained move above the 50-day average would be the first sign of renewed bullish interest.

On the downside, support levels are forming around the $430–$440 range, which coincides with a recent consolidation zone and the lower bound of the September rally. A decisive breakdown below $430 could shift the trend bearish, opening the door to deeper support near $400, which aligns with the 200-day average and psychological round-number support. If breached, the next demand zone lies near $375–$380.

Tesla stock price dynamics (August 2025 - October 2025). Source: TradingView

In terms of indicators, the Relative Strength Index (RSI) on the daily chart is hovering just below 50, suggesting a neutral bias, though with potential to turn bullish if price closes above $470. The MACD remains in negative territory, but the histogram is showing early signs of bullish crossover, indicating that buyers may be re-entering on dips. Volatility has also increased significantly, with average daily volume rising over 100 million shares, pointing to investor nervousness or repositioning ahead of a potential fundamental catalyst.

Musk’s $1 trillion pay plan raises governance red flags

The main headline dominating Tesla’s outlook isn’t tied to vehicles or production, but rather its CEO’s future. In a rare public warning, Tesla’s board chair Robyn Denholm cautioned that Elon Musk could leave the company if shareholders reject a proposed $1 trillion compensation package, which is scheduled for vote. The plan includes 12 tranches of stock options linked to highly aggressive milestones, such as achieving a $8.5 trillion market cap, 20 million vehicles sold annually, and commercial deployment of autonomous robotaxis.

The proposal is facing strong pushback from institutional advisers. ISS (Institutional Shareholder Services) criticized the package for being excessive, highlighting the lack of any clause that requires Musk to dedicate full-time attention to Tesla. Critics argue that the plan does little to guarantee executive focus, especially given Musk’s involvement with other companies like SpaceX and X (formerly Twitter). There is also concern over dilution, as issuing such a large volume of stock options could weaken per-share value over time.

Tesla’s business fundamentals are also under pressure. EV demand is softening in North America and parts of Europe, while Chinese competitors like BYD continue to aggressively undercut pricing. Production margins are being squeezed by battery input costs and the need for frequent price cuts to stimulate demand. Additionally, macro headwinds such as high interest rates and weakening consumer sentiment are affecting discretionary purchases like electric vehicles. The risk of Musk departing — or reducing his focus — adds a layer of uncertainty that markets tend to penalize heavily, especially for founder-led companies.

Cautious upside if governance stabilizes

From a tactical perspective, Tesla’s price action is caught between two major forces: technical support and fundamental uncertainty. If the stock can maintain footing above the $430 level and sentiment improves around the pay plan — particularly if it gains shareholder approval or the company offers reassurances about Musk’s future role — a rally back toward $480 is likely. That level has acted as both support and resistance in recent months and remains the immediate upside barrier.

A close above $480 would shift momentum favorably and could trigger a move toward $500–$520, especially if earnings or deliveries in the next quarter surprise to the upside. However, any further deterioration in corporate governance perception or macro pressure could lead to a retest of $400, or even lower toward $375, which is the next major weekly support zone.

Former Stellantis CEO Carl-Peter Forster warned that Tesla may not survive the next decade in its current form due to rising competition and a shifting EV landscape. He highlighted growing pressure from Chinese firms like BYD and traditional automakers rapidly expanding their electric offerings.

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