It’s probably fair to assume that if most people had to fight the same pay-related battles as Tesla CEO Elon Musk, they’d be looking for a new job. But then again, most people don’t have a trillion dollars on the line.
Pay has become a recent hot-button topic for Musk again as Tesla’s lawyers fight to have Musk’s court-rejected pay package reinstated and look to push through a new pay package that would compensate Musk the equivalent of around a trillion dollars. But with it comes stronger voting power to make key decisions within the company. And that’s something he cares deeply about, perhaps maybe even more than the pay itself.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Canada follows in America’s footprint (killing EV tax credit) and car loan payments are becoming a problem. Let’s jump in.
30%: Musk Seethes Over Tesla Pay Dispute
Photo by: YouTube
Musk has said it before: when it comes to his pay packages, it’s not all about the money. The CEO wants to make sure that he’s still the one in the driver’s seat, whatever it takes. That’s why it should come as no surprise that he is once again leveraging his personal tethering to the company as a vehicle to influence his recently proposed $1 trillion compensation package.
The news comes after a weekend reply to a former Tesla employee, Romain Hedouin, on X. Romain was responding to a post from the official Tesla account calling out Institutional Shareholder Services (ISS), a proxy advisory analyst company that makes recommendations to shareholders on how to vote on proposals. ISS (along with another proxy adviser, Glass Lewis) recommended voting against Tesla’s proposals at its November 6th meeting, including Musk’s massive payday.
Reuters reported on ISS’ recommended rejection on Friday:
ISS said that while the board’s goal was to retain Musk because of his “track record and vision,” the 2025 pay package “locks in extraordinarily high pay opportunities over the next ten years” and “reduces the board’s ability to meaningfully adjust future pay levels.”
Tesla’s shares rose after the compensation plan was unveiled last month, as investors believe the pay package would incentivize Musk to focus on the company’s strategy.
Musk’s response to Romain (and addressing ISS) was short, but to the point: “Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla?” Musk asked. “It won’t be me.”
Tesla is by far the most valuable automaker by market capitalization—more than 550% more than the next highest brand, Toyota. It also has the highest price-to-earnings ratio, a stock metric that measures the company’s share price against its earnings per share.
Now, Musk has also claimed before that it’s not all about the pay for him. Rather, it’s about voting control, so that he can guide Tesla into his vision of vision of AI and robotaxis. And, of course, so he can’t be ousted by “activist investors” for political reasons. Translated from Muskspeak, it roughly means that he doesn’t want to be told what to do, or what to say, and wants to have enough voting power to ensure that remains unchallenged.
Meanwhile, investors are in a lose-lose situation. Either approve Musk’s trillion-dollar golden leash or risk his efforts being applied elsewhere. And when so much of Tesla’s valuation is perceived to be tied to the CEO, the latter could be catastrophic to the company’s value.
60%: Canada Follows In America’s Footprint, Ending Its EV Tax Credit
Photo by: InsideEVs
It’s official: Canada’s federal EV rebate has flatlined. Transport Canada has called its iZEV program quits after months of it being put on “pause.”
Just weeks after the U.S. ended its own federal tax credit program, Canada announced that it is doing the same. Transport Canada has been handing out $5,000 rebates for EVs and plug-in hybrids since 2019. And finally, after approving the rebate for more than half a million ZEVs (zero-emission vehicles), Canada’s $2.6 billion wallet has run dry. Automotive News gives the specifics:
The iZEV program ran into trouble in January, as high uptake pushed Transport Canada to warn dealers and automakers it would stop handing out rebates earlier than expected.
The warning prompted a flood of outstanding claims to pour in, creating what amounted to a run on the program. Remaining funding was exhausted in a single weekend, leaving hundreds of dealers on the hook for more than $10 million in rebates that had already been awarded to consumers at the point of sale.
After months of pressure, Transport Canada reopened its iZEV claims portal in July to allow dealers who had awarded incentives to consumers to file for government reimbursement.
The death spiral, as mentioned by Automotive News, started in January when the feds warned dealers that the program was running out of funds. It had just $71.8 million left, and when Tesla heard of this, it filed for more than half that—$43.1 million in rebates were claimed within 72 hours across four Tesla outlets. This led to the portal’s closing and dealerships claiming that Tesla was gaming the system.
Ultimately, Canada found that Tesla did no wrongdoing and re-opened the portal for dealers to put in remaining claims before pulling the plug. As of now, no successor program has been identified.
“The Government of Canada continues to explore ways to support consumers, benefit Canadian workers and strengthen domestic supply chains,” Transport Canada spokesperson Hicham Ayoun said in an email.
Those in Canada’s auto sector aren’t hopeful, either. Some have called for eliminating the harmonized sales tax on EVs, while others are pressing for more provincial support. At minimum, they’re calling on the government to provide financial support for infrastructure projects to stimulate EV adoption without direct incentives.
90%: More Americans Are Struggling To Pay Their Car Loans
Photo by: Kia
More and more Americans are paying through their nose for their car like it’s a second mortgage. We’re talking average transaction prices over $50,000 and seven-year loans being the norm. It also means more folks are defaulting on their loans.
According to a new article from the New York Times, the number of subprime auto loans—notes written out to borrowers with lower credit scores—more than 60 days past due is hovering around a record 6.5%. That’s the highest level in more than a decade. Repossessions are up, and lenders are sounding the alarm that some borrowers simply aren’t able to pay anymore.
Here’s an excerpt from the Times explaining what’s going on:
The share of subprime auto loans that were 60 days or more past due reached a high of nearly 6.5 percent in January and has lingered near that level, according to Fitch Ratings.
Repossessions have swelled, more drivers are trading in vehicles that are worth less than they owe and lenders such as CarMax and Ally Financial have warned investors about auto loan performance.
But the weakness in the auto market is one of the clearest indications that low- and middle-income families — the economy’s foundation — could be starting to buckle. Because many Americans need their cars to get around, auto loan delinquencies can be a telling gauge of financial hardship.
“Is this evidence that we have some consumers under stress?” asked Jonathan Smoke, the chief economist at Cox Automotive, a research firm. “I would say yes, most definitely.”
At the start of the pandemic, it was a different story. Stimulus checks came and student loans paused. On top of that, cheap credit made everyone feel a little bit richer, along with rising wages, combined with fewer expenses thanks to remote working. Then inflation started to rear its head.
Fast forward to 2025 and now repossessions are the highest on file in Q3 since 2009—and, yes, that’s even more than the 2008 recession. There’s a combination of reasons behind it, too. Prices for both new and used cars remain higher than ever, interest rates have more than doubled, and more loans are hitting 80 months than ever before. More from the NYT:
Borrowers with higher credit scores are also showing evidence of strain. Roughly 2 percent of all auto loans were significantly overdue last month, slightly more than a year ago, a Cox Automotive analysis of credit data showed. And researchers at the Federal Reserve Bank of New York found that the rate at which loans transitioned into delinquency has been rising for borrowers across ZIP codes and credit score bands.
“Higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum,” the researchers wrote. They noted that borrowers with lower incomes and credit scores were under additional pressure because they might have purchased used cars whose prices soared in the pandemic and have since declined.
The good news is that we’re not seeing all of the indicators of 2008 all over again. New York Fed data suggests that car loans make up less than 10% of all household debt (which is currently at around $18.4 trillion). And new car loans? Those are performing a bit better than the ones issued in 2022 and 2023, which may be because of stricter lending requirements that favor more prime debtors.
100%: Let’s Answer Elon. Who Do You Want Running Tesla?
Photo by: Tesla
Musk’s recent question was a good one: “Which of those CEOs would you like to run Tesla?”
He was referring, of course, to the CEO of any publicly-traded automaker who might take his place (thinly hinting that there is no one who fits the bill) should he not be granted his compensation package and stake in Tesla. Maybe that’s a good thing, though. If Tesla is faced with a shakeup, it gives the automaker a chance to refocus on EVs again, and a CEO the chance to pick up a modern vertical stack that others would envy.
If you had to choose someone today to replace Musk, who would it be, and why? Let me know in the comments.
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