Let’s strip away all the hype, all the noise and all the controversies for a moment and get real: I do not think there would have been a Tesla, as we understand it today, without Elon Musk.
No, he didn’t start the company, as many believe. But Musk’s early capital, leadership through the Great Recession, early product decisions, ability to hype the company on social media channels (including one he’d later own) and general Steve Jobs vibes are a major part of what propelled the company to its current state.
You could read that last part as criticism, too. Tesla’s market share has tanked in recent years, especially in response to Musk’s vocally right-wing politics. The company isn’t innovating much lately on its core product, which is still electric vehicles. Musk is also routinely accused of being “distracted” by his many other ventures in AI, space travel, social media and beyond. But now, he wants an unprecedentedly large payday to get back on track—and one that will hand him tremendous control over the company’s long-term trajectory.
So the question Tesla shareholders will ask this week is: Should one man have all that power?
Your must-read news roundup becomes an email newsletter soon.
That kicks off this Monday edition of Critical Materials, our morning roundup of industry and technology news. Also on deck today: Chinese automakers like BYD and Xpeng go in different directions, and what’s going on with the 2025 edition of the semiconductor shortage. Let’s go.
30%: Musk’s Will On Earth Be Done
Photo by: YouTube
I would be utterly shocked if Tesla shareholders did not vote to go forward with Musk’s trillion-dollar pay package at Thursday’s annual meeting in Austin. As we’ve covered before, Musk has intimated he may take his talents elsewhere if he doesn’t get what he wants, and there’s just too much riding on Tesla’s stock price and market capitalization—the latter eclipses many other carmakers combined—to see him go. If he did, it’s very possible a lot of that value would evaporate.
Ahead of that meeting, let’s recap what’s at stake, via the New York Times:
Mr. Musk would acquire voting control over nearly 29 percent of Tesla shares if he met all of the targets in a 10-year performance plan. Among other things, the company would have to deploy one million humanlike robots and boost its stock market value to $8.5 trillion from $1.4 trillion today.
That sounds difficult. But the plan would also allow Tesla’s board of directors to grant Mr. Musk a portion of the shares even if he fell short.
Tesla’s board sees the plan as a way to motivate him as he transforms the company from primarily selling electric cars to making robots and self-driving taxis.
Other KPIs for Musk’s big payday include “20 million Tesla vehicles delivered, 10 million active FSD Subscriptions, 1 million robotaxis in commercial operation and a series of adjusted EBITDA benchmarks,” as CNBC described it. And Musk could still net billions of dollars without meeting most of those targets.
But back to the NYT’s report real quick. As you’d expect, the big Tesla bulls, major Wall Street firms, the Big Tech investment comapnies, Musk’s not-terribly-independent board and a great many Tesla superfans are expected to vote yes on the pay package. Plus, Musk himself can vote, and he controls about 15% of Tesla already.
Against: various pension and retirement funds, those that follow the advice of advisory firms like Glass Lewis and ISS, and anyone who cares what the Pope has to say:
Even Pope Leo XIV has weighed in, citing Mr. Musk’s pay as an example of the gap between rich and poor. “If that is the only thing that has value anymore, then we’re in big trouble,” he told Crux, a Roman Catholic news site, this summer.
“I don’t think it’s an overstatement to say that it would revive the era of robber barons who wielded near-absolute control,” Brad Lander, the New York City comptroller, said during a conference call organized by SOC Investment Group, an organization associated with labor unions that opposes Mr. Musk’s compensation plan.
If Musk doesn’t get what he wants, he’ll probably leave Tesla, and the company would need a new CEO (or CEOs) who would likely ascend from within, board chair Robyn Denholm has said. If he stays, Tesla is going to be intertwined with Musk himself, likely permanently. And the thought of that company without Musk at the helm may be too much of a risk for those in deep on $TSLA to even consider—but all their faith in that one man could easily be their undoing as well.
60%: BYD Down, Xpeng Up
Photo by: Xpeng
Gravity comes for us all. While BYD has had a meteoric rise across the world in recent years, it’s now bearing the brunt of China’s new-car market slowing down. After posting its second consecutive drop in year-over-year sales and second consecutive decline in quarterly profits, BYD’s shares neared their lowest in almost nine months, Bloomberg reported today.
But one company proves the entire Chinese car market isn’t tanking. And while it’s too small to be called “the next BYD” or anything similarly hyperbolic, it is worth watching. That’s Xpeng, the high-tech Chinese startup that’s a kind of Tesla analogue—it even has robots—but is making much more headway on more affordable EVs like the Mona M03 above. Here’s CNBC with more:
Xpeng [continued] its all-year-round winning streak, delivering 42,013 vehicles. This marks the second time the startup has topped over 40,000 vehicles this year. The latest 40,000 breakthrough comes after the release of the Mona series in late August, which began deliveries in September. Xpeng reported its namesake brand and Mona-branded cars in its monthly total and did not break out global and China sales figures.
The Mona series is Xpeng’s mass-market brand that carries models such as the M03 sedan for as little as 119,800 yuan ($16,812) or 155,800 yuan for more advanced assistive features.
Xpeng’s steady rise puts growing pressure on Elon Musk’s Tesla, which saw its deliveries fluctuate amid the crowded EV market.
For context, Xpeng’s monthly sales are still just 10% of what BYD did in October. But since it’s the company that’s also tasked with making the Volkswagen Group’s new EV software in China, it’s worth keeping an eye on long-term.
Our man Kevin Williams is headed to an Xpeng event in China right now, in fact. Stay tuned for more.
90%: Can The Auto Industry Avoid Another Chip Crisis?
Photo by: InsideEVs
On Friday, we dove into the latest supply chain crisis roiling the auto industry: Dutch automotive chipmaker Nexperia is in the middle of a semiconductor shortage. A recent geopolitical standoff has put its supply chain at risk, after the Dutch government took control of the company due to national security concerns, prompting a retaliatory ban on exports by its parent company in China.
In the short term, another chip shortage could impact vehicle production and lead automakers to prioritize chips, features and even the manufacturing of their more expensive and profitable cars—much as we saw in 2020 and 2021.
But as of today, relief may be coming, CNBC reports:
Shares of Europe’s biggest carmakers rose on Monday as fears over an industry shortage of semiconductors appeared to recede.
China on Saturday said it would consider some exemptions for Nexperia chip exports. It had previously blocked Nexperia semiconductors from leaving the country after the Dutch government seized control of Nexperia, owned by the Chinese company Wingtech.
The standoff between the Netherlands and China had prompted automotive groups to raise the alarm over a worsening chip shortage.
The larger question that needs to be asked here is: didn’t anybody learn anything from the last chip crisis? It’s astounding that one company, yet again, stands to disrupt the entire sector this much.
100%: What Does A Tesla Without Musk Look Like?
Elon Musk on stage at the Tesla Semi and Roadster reveal in 2017.
Photo by: Tesla
Does it stay the course on autonomous cars, robots and AI, or would a new and different CEO be smart enough to prioritize more affordable EVs in the meantime? Drop your thoughts in the comments.
Contact the author: patrick.george@insideevs.com
