v3.25.4
Equity Incentive Plans (Tables)
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Summary of Stock Option, RSU and Restricted Stock Activity
The following table summarizes our stock option and RSU activity for the year ended December 31, 2025:
Stock OptionsRSUs
Number of
Options
(in thousands)
Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Life (years)
Aggregate
Intrinsic
Value
(in billions)
Number
of RSUs
(in thousands)
Weighted-
Average
Grant
Date Fair
Value
Beginning of period344,535$40.41 18,661$233.02 
Granted13,128$338.43 8,444$360.99 
Exercised or released(7,289)$112.43 (7,089)$241.62 
Cancelled(6,268)$187.47 (3,004)$254.57 
End of period344,106$47.58 2.68$138.38 17,012$289.15 
Vested and expected to vest, December 31, 2025340,111$43.98 2.60$138.00 16,628$286.47 
Exercisable and vested, December 31, 2025320,430$29.62 2.22$134.61 
Schedule of Share Based Payment Award Stock Options and Employee Stock Purchase Plan Valuation Assumptions The weighted-average assumptions used in the Black-Scholes model for stock options are as follows:
Year Ended December 31,
202520242023
Risk-free interest rate3.95 %3.92 %3.90 %
Expected term (in years)4.74.34.5
Expected volatility60 %59 %63 %
Dividend yield— %— %— %
Grant date fair value per share$178.36 $114.29 $121.62 
The weighted-average assumptions used in the Monte Carlo simulation model for the purpose of determining the grant date fair value of the 2025 CEO Performance Award is as follows:
Expected award term (in years) (1)9.8
Expected share price volatility60 %
Dividend yield— %
Risk-free rate of return4.06 %
Dilution adjustment15 %
Illiquidity discount (2)
0% - 14%
Grant date fair value per share (3)
$284.24 - $337.74
(1)The expected award term is the period from the shareholder approval date to the end of the performance period.
(2)The illiquidity discount was determined using a valuation model that uses the same expected share price volatility applied in the Monte Carlo simulation model and tax rates utilized are equal to the federal tax rate, plus our best estimate of personal tax rates based on available payroll information.
(3)The stock-based compensation expense recognized will depend on the date a given tranche vests if at all. The range in grant date fair value per share reflects differences in any applicable holding period that may be in effect post-vesting for each tranche.
Summary of Operational Milestone Based on Revenue or Adjusted EBITDA
Tranche #Number of Shares Subject to TrancheMarket Capitalization Milestones (2)Operational MilestonesAchievement Status
135,311,992
$2.0 trillion
Achievement of any 1 of the 12 Operational Milestones-
235,311,992
$2.5 trillion
Achievement of any 2 of the 12 Operational Milestones-
335,311,992
$3.0 trillion
Achievement of any 3 of the 12 Operational Milestones-
435,311,992
$3.5 trillion
Achievement of any 4 of the 12 Operational Milestones-
535,311,992
$4.0 trillion
Achievement of any 5 of the 12 Operational Milestones-
635,311,992
$4.5 trillion
Achievement of any 6 of the 12 Operational Milestones-
735,311,992
$5.0 trillion
Achievement of any 7 of the 12 Operational Milestones-
835,311,992
$5.5 trillion
Achievement of any 8 of the 12 Operational Milestones-
935,311,992
$6.0 trillion
Achievement of any 9 of the 12 Operational Milestones-
1035,311,992
$6.5 trillion
Achievement of any 10 of the 12 Operational Milestones-
1135,311,992
$7.5 trillion
Achievement of any 11 of the 12 Operational Milestones (1)-
1235,311,992
$8.5 trillion
Achievement of any 12 of the 12 Operational Milestones (1)-
Total423,743,904
(1)The 11th and 12th tranches are earned upon the later of (i) the date on which the last Performance Milestone applicable to such tranche is completed and (ii) the date on which the CEO succession framework developed by our CEO is approved by the Board of Directors.
(2)Market capitalization milestones are measured on a trailing average basis over both a six-month period and a 30-day period. Achievement may also be measured over a one-year period in connection with the deemed achievement of certain product goals.
The operational milestones generally required for any shares to become Earned Shares are defined as follows:
Milestone #Operational Milestones (3)
1
20 million Tesla vehicles delivered
2
10 million active FSD subscriptions
3
1 million bots delivered
4
1 million Robotaxis in commercial operation
5
$50 billion of Adjusted EBITDA
6
$80 billion of Adjusted EBITDA
7
$130 billion of Adjusted EBITDA
8
$210 billion of Adjusted EBITDA
9
$300 billion of Adjusted EBITDA
10
$400 billion of Adjusted EBITDA (4)
11
$400 billion of Adjusted EBITDA (4)
12
$400 billion of Adjusted EBITDA (4)
(3)Adjusted EBITDA is defined as net income (loss) attributable to common stockholders before interest expense, provision (benefit) for income taxes, depreciation, amortization and impairment, stock-based compensation and digital assets gains and losses for the four consecutive quarters that immediately precede such determination date.
(4)Meeting the last three Adjusted EBITDA operational milestones requires achieving Adjusted EBITDA of $400 billion in three non-overlapping periods, each made up of four consecutive quarters.
Schedule of Stock-Based Compensation Expense
The following table summarizes our stock-based compensation expense by line item in the consolidated statements of operations (in millions):
Year Ended December 31,
202520242023
Cost of revenues$870 $776 $741 
Research and development1,332 832 689 
Selling, general and administrative623 389 382 
Restructuring and other— 2 — 
Total$2,825 $1,999 $1,812