Tesla has handed Elon Musk €25bn worth of shares after the tycoon threatened to quit the electric car maker, writes Calum Muirhead.

The firm said its board agreed to give its billionaire head 96m shares as part of a pay deal, according to a recent filing.

Tesla's share price of $309.60 values the package at $29bn, but under the plan, Musk must pay the company $23.34 a share.

The firm said it was "an important first step" in compensating Musk for "his extraordinary work", adding: "Retaining Elon is more important than ever before", and crucial in attracting new talent as Tesla shifts its business towards AI and self-driving robo-taxis.

Daniel Ives, analyst at Wedbush Research, said the package would be enough to "keep Musk as chief executive of Tesla at least until 2030," and that he was the firm's "most important asset".

Musk, the largest shareholder with a 12.7pc stake, threatened to quit if he was not given more shares, saying activist shareholders could "easily" oust him.

He and the company remain embroiled in a legal battle in Delaware over a €52bn pay award granted to Musk in 2018. That was struck down by a judge last year, who ruled it excessive.

Tesla said that if the ruling is reversed on appeal, Musk will forgo the €25bn package. Its shares rose 2.2pc.