Elon Musk’s $56 Billion Tesla Pay Shot Down By Delaware Judge

Happy Wednesday! It’s January 31, 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.

The Hype Behind Tesla Stock Success In 2023

1st Gear: Elon Musk’s $56 Billion Tesla Pay An ‘Unfathomable Sum’ Says Delaware Judge

Elon Musk is the world’s richest man, but still he wants ever more cash in his coffers. His latest Tesla pay schedule would’ve won him an extra $56 billion, but a Delaware judge overturned it — calling it an “unfathomable sum,” and saying shareholders shouldn’t be on the hook for such a compensation package. From Reuters:

A Delaware judge tossed out Elon Musk’s record-breaking $56 billion Tesla (TSLA.O), opens new tab pay package on Tuesday, calling the compensation granted by the EV maker’s board “an unfathomable sum” that was unfair to shareholders.

Shares of Tesla dropped about 2% in premarket trade, and some investors seized on the ruling in hopes it might prompt Tesla to overhaul its governance.

The Tesla board has been criticized as failing to provide oversight of its combative, headline-making CEO, who has fought regulators and led several other companies at the same time.

The ruling, which can be appealed, nullifies the largest pay package in corporate America. The judge found the share-based compensation was negotiated by directors who appeared beholden to Musk, currently ranked by Forbes magazine as the world’s richest person.

Perhaps the most staggering part of this whole ordeal is that the judge in question is from Delaware — commonly known to be one of the most judicially corporate-friendly states in the Union. Though it seems Musk things otherwise:

2nd Gear: GM EV Plant Fire Caused $1 Million In Damages

Late last year, a massive blaze began at GM’s Factory Zero plant after a forklift reportedly stabbed a package of lithium ion battery materials. Now, we’re finally figuring out the full scope and scale of the blaze. Turns out, when a battery factory goes up in flames, it goes up big. From Automotive News:

A fire that broke out at General Motors’ Factory Zero in December resulted in more than $1 million in damage and has sparked concerns about the protocol for battery fires at the electric vehicle plant — the first of its kind for the automaker and the city of Detroit.

Nearly 100 Detroit firefighters and two dozen firetrucks responded to the three-alarm fire Dec. 19 at the assembly plant straddling the Detroit-Hamtramck border, according to the incident report obtained by Crain’s Detroit Business through a Freedom of Information Act request. Crain’s is an affiliate of Automotive News.

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The December incident marked the eighth or so time the fire department had made a run to the plant since the summer, said Dennis Hunter, chief of fire prevention for the Detroit Fire Department. The EV batteries’ volatile chemistry makes them more prone to catching fire — a major concern for the industry and first responders, especially as EV production volumes increase and battery plants proliferate across Michigan and the rest of the country.

Cars have had batteries since time immemorial, but the massive batteries needed for EVs will likely require some new safety protocols in auto-making factories. I would put “do not stab the batteries with forklifts” near the top of the fire-prevention task list.

3rd Gear: Donald Trump Asks Whether Shawn Fain Is Sabotaging American Automaking For China

Fresh off the massive UAW strike against the Big Three — and while still preparing for a general strike in 2028 — Shawn Fain recently endorsed President Biden’s reelection campaign on behalf of the UAW. Donald Trump did not love this, apparently, and reacted accordingly on Truth Social. From the Detroit Free Press:

Former President Donald Trump is firing back at United Auto Workers President Shawn Fain, calling him a “weapon of mass destruction” on autoworkers.

Trump’s remarks, made Monday on social media, came after the UAW said last week it would endorse President Joe Biden in his bid for reelection. At the time, Fain called Trump a member of the billionaire class looking to divide people, noting, “Donald Trump is a scab. Donald Trump is a billionaire and that’s who he represents. … Donald Trump stands against everything we stand for as a union.”

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Trump fired back Monday in a social media post on Truth Social writing: “Shawn Fain is a Weapon of Mass Destruction on Auto Workers and the Automobile Manufacturing Industry in the United States! Is he under contract to China, because they will be getting almost all of our ‘Car making’ Business within a very short period of time. All Autoworkers should VOTE FOR TRUMP. MAKE AMERICA GREAT AGAIN!”

Perhaps the most confusing part of the whole post is the set of quotes in “’Car making’ Business.” Is Trump implying that the UAW doesn’t make cars, or that America doesn’t make cars, or that if China were to take over production then they would not be making cars? I love a scare quote as much as the next writer, but what does this one mean?

4th Gear: California’s EV Sales Are Slowing

California has long been the bastion of EV ownership in the United States thanks to its mild weather, liberal politics, and glut of tech money. But even in that battery-powered nirvana, it seems EV sales are starting to taper off. From Automotive News:

When it comes to cars, California has long served as a trendsetter for much of the nation, both in styling and regulation. But has it now become the canary in the coal mine, signaling a warning for the industry?

Following a long, seemingly inexorable climb, registrations of battery-electric vehicles in California fell in the fourth quarter of last year. EV sales have now fallen for two consecutive quarters in the state, even as California regulators set a 2035 deadline for all new auto registrations to consist of zero-emission vehicles.

“When I think about California’s overall adoption, this is just part of this transition. But if we see more quarters like this, it will be indicative of a slowdown,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive.

California registered 89,993 electric light passenger vehicles in the fourth quarter, a 10 percent decline from the 101,151 in the third quarter, according to data compiled for the California New Car Dealers Association by Experian Automotive. The third quarter represented a small dip from the 102,991 EVs registered in the second quarter of 2023.

A single-quarter drop in sales isn’t, on its own, a concerning trend. If the stagnation keeps up through the coming months, however, that could be a market movement that strikes fear in the hearts of automakers.

Reverse: And Then There Was No More Slavery! No One Google The Exemption That Legalized Slavery In Prison Labor

On The Radio: Porter Robinson – ‘Sad Machine’

Porter Robinson – Sad Machine (Official Lyric Video)

Ever since throwing Shelter in TMS a couple days ago, I’ve been on a massive Porter Robinson kick. I have no way to know when it will end.