TSLA Stock Slips Overnight: Elon Musk Faces Massive Tax Bills From Giant Tesla And SpaceX Stock Awards

• Musk said he pays a combined 45% federal and state tax rate when exercising and selling stock options.
• The CEO currently holds 717.1 million Tesla shares, representing a 20% stake in the automaker.
• SpaceX has also reportedly approved massive equity-based awards for Musk based on future milestones.

Shares of Tesla, Inc. (TSLA) slipped nearly 1% in overnight trading on Wednesday, trimming gains from the regular session. CEO Elon Musk drew some attention after claiming he pays a combined federal and state tax rate of 45% when exercising and selling stock options, spotlighting billionaire taxation concerns as Tesla’s massive compensation returns to the fore.

TSLA stock jumped more than 2% on Wednesday, ending at $398.73.

Musk’s Massive Stock Awards Draw Attention

Musk said on X that he had paid more than $10 billion in taxes in a single year, which he said was “more than anyone in history.”

“If I exercise and sell stock options, the combined federal and state income tax is ~45%,” Musk said, adding that he still pays California taxes for every day he spends in the state. Musk also said another 40% tax would apply to his estate after death and claimed he would “probably end up paying trillions in taxes.”

Musk’s comments come after Tesla recently disclosed fresh details of the CEO’s long-term compensation at the automaker. A recent filing showed that Musk’s 2025 compensation package at Tesla came in at $158.4 billion for accounting purposes, while the broader shareholder-approved performance package could eventually be worth as much as $1 trillion over the next decade if Tesla achieves aggressive operational and valuation targets.

These milestones include growing Tesla’s market cap to $8.5 trillion from its current $1.2 trillion, delivering 20 million vehicles annually, deploying 1 million robotaxis into commercial service, and selling 1 million Optimus humanoid robots. Tesla said that the compensation package is divided into 12 performance-based vesting tranches extending through 2035, and added that Musk will receive payouts only if the company achieves the required milestones.

The filings also showed that Musk currently holds 717.1 million Tesla shares, representing about 20% of the company after excluding forfeited interim award shares. Tesla said Musk is poised to control 20.3% of voting power once he exercises his outstanding options, which he has committed to doing by Aug. 15. Musk’s latest comments suggest that if large portions of those stock-based awards are eventually earned, exercised, and sold, the tax liabilities could themselves become enormous.

SpaceX Equity Awards Add To Tax Concerns

The broader tax debate also comes as SpaceX reportedly pushes deeper into massive equity-based compensation from future long-term goals. SpaceX has apparently approved a compensation structure for Musk based on milestones, including establishing a permanent human colony on Mars and operating orbital AI data centers capable of delivering at least 100 terawatts of processing power. 

The package could award Musk 200 million super-voting restricted shares if SpaceX reaches a $7.5 trillion valuation and successfully establishes a Mars colony with at least one million people. The compensation also includes additional restricted share awards based on valuation milestones and orbital data-center targets. SpaceX is targeting a mid-2026 IPO that could value the company between $1.75 trillion and $2 trillion.

Tesla’s Ties Across Musk Empire Grow

Musk’s tax comments also come as his broader business empire becomes increasingly interconnected around AI and space infrastructure. Late Wednesday, Musk said xAI would no longer operate as a separate company and would instead integrate into SpaceX under the “SpaceXAI” banner. The move followed a deal involving Anthropic and SpaceX’s Colossus 1 AI supercomputer cluster in Memphis, which contains more than 220,000 Nvidia GPUs.

Tesla’s latest disclosures also highlighted extensive business ties across Musk-controlled companies. SpaceX paid Tesla $143.3 million in 2025, mainly for vehicle purchases, while xAI paid Tesla $430.1 million during 2025 and another $78.1 million during the first two months of this year, primarily for Megapack battery systems used at AI data centers.

How Do Retail Traders Feel About TSLA?

On Stocktwits, retail sentiment for Tesla slipped to ‘bullish’ from ‘extremely bullish’ levels a week ago amid ‘normal’ message volume.

One user said, “Great day for TSLA! Way underbought. Going higher! The deal with Anthropic is just the beginning.”  

Another user said Tesla is a “monster company and the merger with SpaceX makes it golden.”

So far this year, TSLA stock has lagged its “Magnificent Seven” peers, making it the group’s second-worst performer, with a 11% decline.    

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