European Tesla Sales Falter to Competition as Shareholders Consider $1 Trillion Pay Package for Elon Musk

Tesla’s sales are plunging in several European countries as car buyers sour on the company’s aging lineup just as CEO Elon Musk is trying to cash in on a $1 trillion payday from the electric vehicle company that he founded.In October, Tesla’s sales were down 77 percent from the month prior in Sweden, and 67 percent from a year earlier. The electric car company sold just 133 vehicles throughout the month, according to Mobility Sweden, which tracks vehicle registrations as a proxy to purchases. Vehicle registrations were holding steady for the year, with electric cars accounting for 67 percent of all new cars on Swedish roads in October.Tesla sales were also down last month in Norway, falling after two months of market growth in the Nordic nation, where Tesla’s Model Y dominated electrical vehicle purchases in September. Electric vehicles now make up nearly 99 percent of all new car sales there. In Denmark, the automaker saw an 86 percent drop from a year ago. Volkswagen and Skoda dominated the electric vehicle sales market in September while Tesla rounded out the bottom 10. Germany, too, lost its taste for Tesla in the past several months, as new electric car buyers turned to Volkswagen and BMW. Newer vehicles from China are among the purchases grabbing market share in Scandinavia as Tesla’s aging product line has not been refreshed or expanded. The company is also still waiting for approval for its most advanced driver-assistance software in the European Union.Tesla is facing headwinds in most of Europe, where Mr. Musk’s embrace of far-right candidates like the Alternative for Germany party led to early-year boycotts of Tesla, including by two of Germany’s largest companies, Rossman pharmacy chain and LichtBlick energy company, which cut off large purchases for their fleets. Tesla vehicle sales in the United States have also declined for two years in a row. A study published last month by the National Bureau of Economic Research estimates that Tesla lost at least one million vehicle sales in the past two and a half years. The study found negative perceptions of Mr. Musk related to his actions following the purchase of Twitter, now X, intensified over his partisan activities during the 2024 election, including a $300 million contribution to the Trump campaign. His subsequent actions with the Department of Government Efficiency “antagonized his most loyal customer base,” researchers found, since Democrats were far more likely than Republicans to buy an electric vehicle.The sales troubles Tesla faces come against the backdrop of a proposed $1 trillion pay package for Mr. Musk. Shareholders will vote on the deal Thursday. The board proposed the largest corporate pay package in history in September, tying Mr. Musk’s compensation to bold benchmarks that the company must achieve before a payout. The board said the pay package was needed to incentivize Mr. Musk to meet a very ambitious set of goals.Morgan Stanley praised the $1 trillion package in September, calling it a “good deal” for shareholders, noting its value is dependent upon Tesla moving forward with Mr. Musk’s ambitions for driverless vehicles, AI, and robots.The pay package has received pushback from one group of Tesla shareholders who urged fellow investors to reject the proposal, citing the company’s “erratic performance” and a failure by the company’s board to provide meaningful real-time oversight of management.“The Board’s relentless pursuit of retaining its CEO seems to have harmed the Company’s reputation, led to extraordinarily high levels of executive compensation, and delayed progress on meeting key goals like full self-driving,” reads a letter from SOC Investment Group and other shareholders.Critics note that the pay package would allow the board to grant Mr. Musk a portion of the shares even if he doesn’t meet the overall goals.The new pay package does not require Mr. Musk to dedicate a specific amount of his time to Tesla. Mr. Musk divides his time among several companies, including his artificial intelligence company, xAI, which merged with X earlier this year. He also runs rocket company SpaceX and health company Neuralink.A Delaware court struck down a prior $55 billion pay package for Mr. Musk, citing board members being too close to him personally. The Delaware supreme court is still considering the pay package at the heart of the Tornetta v. Musk lawsuit. No timeline has been set by the court to issue a decision in that case.

European Tesla Sales Falter to Competition as Shareholders Consider $1 Trillion Pay Package for Elon Musk

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