Elon Musk has become a lightning rod for Tesla over his role in the Trump administration. (Photo: Vauxford/NYI Collage)
Tesla stock is tanking, down 20% today (Nov. 7), one day after the board voted to give Elon Musk a $1 trillion pay package tied to a bunch of near impossible goals.
The tech-heavy Nasdaq Composite Index, on which Tesla trades, led the market decline, falling around 1.8%.
It looks like it will be the tech index’s deepest loss since April and Trump’s tariff “Liberation Day.” Analysts cited concern about a tech bubble, and negative ecomomic reports.
The University of Michigan reading of overall consumer sentiment dropped to 50.3, about a 6% decline from October and the worst since 2022.
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The pullback was driven by respondents’ worsening outlook for their own current personal finances and expectations for year-ahead business conditions.
In addition, job cuts hit their highest level for the month in more than 20 years, underscoring what’s shaping up to be the worst year for layoffs since 2009.
The Tesla board granted Musk the outsized pay package despite the economic warning signs.
Musk’s headlong plunge into right-wing politics domestically and his meddling in European elections in favor of far-right parties turned the brand toxic.
Tesla cars became a target of protests because of their close assocation with the billionaire.
Tesla’s European sales dropped 49 percent year-on-year in January and February, despite rising registrations of electric vehicles (EVs).
In the United States, Tesla registrations fell 11% year-over-year, according to S&P Global Mobility data.
It’s market share is still formidable at 42% of total EV sales, but the brand is suffering nearly irreparable damage.
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For all of 2025, Tesla’s domestic sales are projected to be lower than 2024, a roughly 10% decline. Factors include increased competition, the end of EV tax credits, and the slower-than-expected rollout of new models.
European sales have fallen off a cliff. New registrations are down 30% through the first 10 months this year.
The Tesla Cybertruck has been a sales disaster. Musk initially forecast 250,000 annual sales. But only about 20,000 units have sold nationally. Third quarter sales were off by 63% compared to the same quarter in 2024.
“[Tesla has] lost its status as a progressive ‘badge’ product,” crisis management expert Eric Dezenhall, founder of Dezenhall Resources, told Yahoo Finance.
Against that backdrop, Musk’s pay package is divided into 12 “tranches,” or milestones that Tesla must achieve for Musk to be paid.
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To receive the first tranche, Tesla must hit a market capitalization of $2 trillion. Tesla’s current market cap is $1.54 trillion, according to CNBC.
The next nine tranches would be awarded if Tesla’s value increases by increments of $500 billion, up to $6.5 trillion.
Musk would earn the last two tranches if the market cap rises by increments of $1 trillion, meaning it would need to hit $8.5 trillion for Musk to get the full package.
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But that’s not all. Tesla must also hit $50 billion in annual adjusted profit and climb to $400 billion. In the third quarter, Tesla reported adjusted EBITDA of $4.2 billion.
Tesla must also sell 20 million cars, compared to 8 million sold to date. It must also book 10 million active FSD (Full Self-Driving) subscriptions, deliver 1 million Optimus humanoid robots and put 1 million robotaxis on the road, according to its September proxy statement.
Unless something dramatic happens, however, it’s hard to see how Musk will reach any of those goals.
Here’s our ode to Tesla. Sung to the tune of “Almost Cut My Hair” by CSNY
Almost bought a Tesla,
Happened just the other day
Because the car seemed kinda’ cool
I coulda’ said it was the way
But I didn’t, and I wonder why
I felt like buying one would be a lie.
Now, I feel… like explaining why
It’s because Elon Musk is spewing hate
I’m so shocked, I slammed on the brakes
And, I’m not feeling up to par…
Like lookin’ in my mirror and seeing a self-driving car
It increases my paranoia
But I’m not giving in an inch to fear
Musk is inciting violence, so I’m making it clear
I’m ditching the brand
Because I promised myself
Hate has to end
I hope the world finally gets itself together
And finally decides to put hate in its place
Separate the wheat from the chaff
Give peace a chance for every race
I feel like I owe it to say,
Musk’s a total disgrace… yeah