Elon Musk and the Decline of Tesla
The megalomaniac CEO extracted $48 billion from his shareholders. But the company’s future does not look good.
BY RYAN COOPER JUNE 17, 2024
The last few months have been some of the most challenging in Tesla’s history. The launch of its first new car in years, the Cybertruck, has been plagued with problems. Customers have complained about badly misaligned body panels, shockingly sharp door edges that have sliced customers’ limbs, an automatic front trunk mechanism that has led to broken fingers, rust, accelerator pedals falling off and jamming the throttle wide open (requiring an expensive recall), the car failing entirely after only a few miles, and more. Even enthusiast tech and automobile outlets that had hitherto been reliably pro-Tesla have written distinctly lukewarm or critical reviews.
In the first quarter of this year, Tesla sales slumped by more than 20 percent, despite major price cuts. Unsold Teslas are reportedly piling up in storage lots across the country. So naturally, Tesla CEO Elon Musk demanded that shareholders give him a pay package worth roughly $48 billion, which was initially rejected by a Delaware judge in a lawsuit. He put the matter to a shareholder vote, and last week, he got the money (along with moving Tesla’s state of official incorporation to Texas).
SNIP Perhaps most important, Musk’s unhinged antics on the site formerly known as (fka) Twitter are clearly alienating chunks of his core customer base, namely affluent, environmentally conscious liberals. For such people, why buy a Tesla when you can get a similar, higher-quality car for the same price or less from a company whose CEO doesn’t endorse neo-Nazi conspiracy theories? That holds double given that the best reason to buy a Tesla, namely the Supercharger network, is going to be opened up to other cars over time. (Whether this network will continue to be built out is another question.)
SNIP So we return to this monster pay package. Just on its own, the very size of it beggars belief. It is something like two orders of magnitude larger than even the most bloated pay packages common among large companies, like the $162 million Hock Tan got for running Broadcom in 2023 (the largest that year). The Economic Policy Institute regularly releases figures showing the genuinely outrageous amounts CEOs pull down; the last report found that at the 350 largest companies, CEOs made an average of 344 times more than the typical worker. But Musk is getting about nine hundred sixty thousand times the pay of a Tesla production associate.
https://prospect.org/power/2024-06-17-elon-musk-decline-of-tesla/
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