Tesla Says Elon Musk Of ‘Tremendous Value’ And Worth $56 Billion Pay

Good morning! It’s Monday, June 4, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Tesla’s Cybertruck Has Finally Arrived

1st Gear: Tesla Defends Elon Musk’s $56 Billion Pay

Would you say Elon Musk is doing a good job at Tesla right now? After all, he has led the car company up to annual sales of 1.81 million cars in 2023, but he has also been in charge during embarrassing recalls and widespread accusations of poor build quality. With that in mind, would you say he’s worth $56 billion?

Well, Tesla seems to think he is as it’s come out to defend his massive pay package, despite warnings from the Institutional Shareholder Services warning that it was excessive, according to reports from Reuters. The EV maker insists that its boss is of “tremendous value” to shareholders, as the site reports:

The compensation, set and approved in 2018 by shareholders, rewards based on Tesla’s market value and operational milestones.

But a Delaware judge voided it in January, and Tesla has since then sought to move its state of incorporation to Texas.

The company said in its Monday filing that shareholder recommendation by ISS is based on a “technical misunderstanding” and that the advisory firm recognized the company’s strong performance under Musk.

In an attempt to justify the pay pack, Tesla has argued that issuing a new deal for Musk to head the company would actually cost shareholders much more than the current deal. In its latest filings, Tesla said that “a deal should be a deal,” and argued that as Musk had “delivered on his end of the bargain,” then it was time for the EV maker to deliver on its promises.

Musk’s end of the bargain, incidentally, involved getting the automaker’s market cap up to $100 billion and meeting a set of strict earnings targets. To his credit, he did hit the market cap goal back in 2020 and the company is now valued at more than $500 billion.

2nd Gear: U.S. Probes Nissan Airbags After They Keep Going Off

After the deadly Takata airbags recall that affected millions of cars around the world shook the auto industry back in 2019, Nissan is now facing airbag issues of its own. According to a report from Reuters, the Japanese automaker is facing a probe from U.S. safety regulators over airbags that deployed incorrectly.

The National Highway Traffic Safety Administration has launched a probe into 75,000 Nissan Rogue Select models from 2015. The probe was launched after a risk was identified that could see airbags deployed when doors were slammed shut. As Reuters reports:

The National Highway Traffic Safety Administration probe was launched in response to reports of inadvertent deployments after the vehicle door is shut or slammed. The agency said such deployments could cause vehicle occupants to be injured or result in the loss of air bag protection.

Nissan said it is “working closely with NHTSA in response to this preliminary evaluation. Nissan values its relationship with NHTSA and will continue to engage in transparent and collaborative dialogue on all matters of product safety.”

The probe from U.S. safety regulators comes just a week after Nissan warned owners of some older cars not to drive them as they may be fitted with un-recalled Takata airbag inflators. Owners of 84,000 2002-2006 Nissan Sentra, 2002-2004 Nissan Pathfinder and 2002-2003 Infiniti QX4 cars have been warned not to drive their cars as they could be fitted with the deadly inflators.

So far, faulty Takata airbag inflators have claimed the lives of 27 people here in the U.S. as they can rupture when deployed, throwing shrapnel into the driver or passengers. The affected Nissan models were originally recalled in 2020 but have not yet been repaired.

3rd Gear: U.S. Auto Sales Were Up 10 Percent In May

After years of doom and gloom about U.S. auto sales being held up by supply chain issues, parts shortages and sky-high prices, it appears as if things are getting back to the way they were. This means that sales are rising across the industry and people get out and buy a whole heap of new cars.

According to five automakers that have so far published their sales for May, car sales in the U.S. were up 10 percent during the last month, reports Automotive News. The sales growth was bolstered by strong demand for hybrids at companies like Toyota. As Automotive News reports:

Automakers reported strong U.S. light-vehicle sales gains for May, led by Toyota, Hyundai and Kia, which were bolstered by hybrids and electric vehicles. Of five automakers that have reported May results so far, sales grew a combined 10 percent.

The estimated seasonally adjusted, annualized rate of sales was 16.08 million, Motor Intellegece reported, the first time it has topped 16 million this year and the highest since July 2023. The SAAR in April was 15.9 million and 15.6 million in May 2023.

At Toyota, sales were up 16 percent in May to 216,611 vehicles, with the company adding that a record 39 percent of models sold were hybrid-powered vehicles. Over at Honda, sales were up 6.4 percent to 127,129 cars, while Hyundai posted 12 percent gains for the period.

Total sales from the automakers who have so far published sales for the month hit 597,216 cars, marking a 10.3 percent increase over the same period last year.

4th Gear: Polestar Just Doesn’t Get These Chinese EV Tariffs

Chinese electric cars are the biggest threat to America right now, or so some keyboard warriors and angry newscasters seem to think. Because of the threat they pose to our security and auto industry, America has just slapped a massive tariff on imports of Chinese-made EVs, in a move that has confused automakers like Polestar, which relies heavily on Chinese manufacturing.

Polestar is owned by Chinese automaker Geely and currently assembles its Polestar 2 and 4 electric cars at facilities in China. As such, the company’s cars are at risk of the 102 percent import tariff that the Biden administration has slapped on EVs made in China and shipped to the U.S.

Company boss Thomas Ingenlath has now questioned the tariffs and their aims, even going so far as to brand their implementation as “erratic,” according to Automotive News. As the site reports:

“There is a certain erratic-ness that comes with going from one day to the next to 100 percent tariffs,” Ingenlath told Automotive News Europe.

Ingenlath conceded that production at Polestar, which is based in Sweden but controlled by China’s Geely, “started with a very Chinese orientation.”

Ingenlath said Polestar recognized its reliance on China early on, which is why it started three years ago to find ways to globalize where its models are built.

The reorganization of Polestar’s production will see it begin building its new Polestar 3 electric SUV at sister brand Volvo’s factory near Charleston, S.C, later this year. The company also has plans to assemble its Polestar 2 car at Renault Korea Motors plant in Busan, South Korea. Both these moves will leave its cars free from the harsh tariffs.

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