Big Auto is begging governments to let them go bankrupt as Chinese EVs loom
Automakers are fiercely lobbying governments to water down already-compromised emissions rules, but doing so will only lead to their doom as market entrants that are serious about EVs will continue ramping them anyway.
The auto industry is electrifying, and all new cars will be electric in the relatively near future. This is not in dispute by any serious person – and any alternative scenario, where humans continue to pollute as much as we do today, will result in worse and worse results for humanity the longer we pollute as climate change becomes progressively worse.
It is necessary that we stop burning fossil fuels, and fast. This is not a matter of opinion, it’s a matter of physics, and physics does not care about your arguments to the contrary.
And yet, the auto industry – which is responsible for more pollution than any other sector, at least in rich countries – still lobbies to worsen emissions reduction targets, even when those targets were already pushed back to begin with.
Automakers beg governments to let them emit more poison
We saw it this week in both Europe and the US. BMW, VW and Renault asked European regulators to push back the 2035 gas car phase-out, despite that this timeline has already been loosened. And in the US, the EPA finalized rules, but softened them due to auto industry lobbying – and the president of the main auto industry lobbyist characterized the final rules as a “stretch goal,” suggesting that he thinks there should be further softening of the already-softened rule.
Even these softened EPA rules will upend the industry, as current automaker commitments are not enough to meet the targets. Either automakers need to up their game, or someone is going to have to fill the millions-vehicle gap between commitments and requirements. And if traditional automakers don’t fill that gap, then new entrants will.
The lobbying is reminiscent of what the industry did from 2017-2021, when it lobbied an ignorant reality TV host to torpedo well-reasoned regulations which would have resulted in significantly more regulatory certainty for the industry. It eventually recognized its error, but Pandora’s box was already opened.
Today, the exact same automaker lobby which originally lobbied to fracture US and CA regulations – the Alliance for Automotive Innovation, previously known as Global Automakers, led by John Bozzella both then and now – still routinely complains about the two regulatory regimes being different, despite being personally responsible for the current state of affairs.
The compulsion against regulation is pathological. Even in situations where it doesn’t make sense to lobby against regulation, businesses will often still do so.
But wait, maybe it’s not a compulsion against all regulation. Because at the same time that automakers are begging for the ability to continue the global-scale mass murder that they continually enable (via pollution that kills millions worldwide per year), they’re also begging governments to slow down other parts of the industry that are taking the EV transition seriously.
Namely: China.
Chinese EVs will grow, whether you like it or not
China is actually a little late to the EV party. Until a few years ago, EV market share in China lagged other leading regions, but uptake in recent years has been quite rapid. NEV (EV+PHEV) market share should crest 50% in China next quarter, ahead of basically everywhere except the Nordic countries.
But as often happens, China may not always be the first entrant into a market, but once it truly commits its effort to something, those efforts tend to bear fruit rapidly.
Chinese EV sales have started taking off overseas, particularly in Europe. While they still make up a relatively small percentage of the market – around 10% – that share has risen rapidly from less than 1% in 2019 (and it might be higher if Chinese automakers could find more ships, but they’re working on that).
In response to this rise in Chinese EV sales, instead of recognizing that they need to pick up their game, European automakers are… begging the EU to investigate the “flood” of Chinese EVs, even to the point of proposing retroactive tariffs. They contend that the Chinese government unfairly subsidizes its auto sector, making prices uncompetitively low. Nevermind that European governments also subsidize their auto sector, and that low prices are good for consumers (in fact, if EU consumers are benefitting from Chinese subsidies, that represents a transfer of wealth from China to the EU).
Sure, begging governments for help isn’t the only thing they’re doing, they’re also finally picking their pants up off the floor and considering building cheaper EVs, but both of these actions are in direct conflict to lobbying efforts to loosen emissions regulations. If you’re worried about competition undercutting you and taking control of the EV transition, the answer is not to cut production and pretend that EV sales are going down when they aren’t, it’s to move faster.
In the US, the anti-China lobbying has been more pre-emptive. There aren’t significant amounts of Chinese-built EVs in the US, and the country already has a number of protectionist tariffs against China.
The recent Inflation Reduction Act, which created hundreds of billions of dollars of incentives for EVs and green energy, does include provisions intended to advantage automakers who avoid using China as any part of their supply chain. And scaremongering about China is abundant throughout US political and economic discussions.
So it’s clear that Western automakers aren’t looking to compete on price or volume, they’re looking to change the rules of the game instead – in a way that ensures more pollution and more expensive vehicles for consumers. They don’t want to win the game, they want the ref to hand it to them. It’s gamesmanship – which the industry is well acquainted with.
Rising EV penetration isn’t due to regulation, it’s due to demand
But do we really think that will work? EV penetration has broadly exceeded the minimums set by emissions rules. The driver so far has not been the rules, it has been consumer demand – and consumer recognition that gas vehicles will soon become an albatross around the neck of anyone who makes the silly decision to buy a new one. We’ve seen it happen in Norway with well above 90% plug-in car sales in advance of its world’s-most-aggressive 2025 target, with China’s rapid rise in EV penetration which caught foreign automakers by surprise, and with California hitting ZEV goals years ahead of schedule.
So loosening the rules doesn’t seem likely to slow down consumer demand – and the public wants stronger rules anyway. Instead, it will just annoy customers who are frustrated that there aren’t enough options available (as has been the case for years – look at the excitement over the R3 and EX30 when so few other small EVs exist), and mollify laggard manufacturers into thinking they can take longer to join the party.
But if automakers (and countries with prominent auto industries, like Japan) want to survive the transition, they cannot be the last to the party. The longer they wait, the more trouble they’ll be in, and the more advantage they cede to their competition.
How do we know this? Because it’s already happened, in this very industry, just over the course of the trailing decade.
Big Auto let Tesla win
Over the course of the last ten years, we’ve seen plenty of efforts to regulate away Tesla’s sales model for example, and few for automakers to actually effectively compete against Tesla’s vehicle programs. We’ve also seen industry push, state by state, for abusive EV fees and other silly regulations in a desperate attempt to punish EVs for daring to be a superior choice.
All of this happened while Tesla gradually entered more segments, and gradually took over those segments. The first indication was around 2014-2015, when sales of large luxury vehicles fell for every manufacturer except Tesla. This happened again with the Model 3. And the Model Y is now the best-selling vehicle in the world. (As for trucks, well, maybe that’ll be a different story)
And yet, despite a decade of warning, it’s only recently that we’ve started seeing serious EV programs from other automakers start to spin up. But most automakers still only have a few EVs, and many of them still share platforms with gas cars. And due to Tesla’s head start, they’re the one company that has gotten scale and costs to the level that they can arbitrarily cut prices, starting an EV price war that they’re best positioned to deal with.
In refusing to act faster to accept the future that’s already here, automakers have already ceded ground. On top of the aforementioned points of market share ceded to Tesla, the industry also gave Tesla the whole concept of fueling stations.
Over the last decade, every automaker said that charging wasn’t their problem and that someone else would come along to solve it, while simultaneously saying that they can’t ramp EVs because there isn’t enough charging out there.
Tesla also said that there wasn’t enough charging out there… so it built chargers (without having to be forced into doing so). And now, as a result of automakers’ intransigence – and also thanks to President Biden’s infrastructure law, which influenced Tesla to finally open up its Supercharger network – every vehicle manufacturer is now using Tesla’s NACS plug, which means all of them will use its Supercharger network, and Tesla will be able to extract profits on fueling from basically every car on the road. “Tesla, you’re welcome”; signed – the auto industry.
The path forward is action, not whining
Describing this recent history is not an attempt to brag by those of us who loudly said time and time again that this was coming, it’s intended as a very recent object lesson in how the automakers’ decisions were the wrong ones, and how they could learn from those decisions and make better ones going forward.
It is clear that business as usual was not the right choice over the last decade, and it’s not going to be the right choice in the next decade either. Relying on the age-old gamesmanship of trying to block new entrants to the market, delay change, and refuse to respond to consumer demand is not going to work for the automakers, especially in a globalized auto market where if you don’t make it, someone else will.
This isn’t to say that everyone in the auto industry is bad. There are plenty of people and even companies who “get it.” While BMW, VW and Renault just complained about EU regulations, the EU automakers’ association ACEA said “we are not contesting 2035… now we must get down to it.” And several automakers have stepped up to defend California’s regulations (including, oddly, both BMW and VW, two who are complaining about EU regulations now).
Frankly, I’ve long said that I don’t care who makes EVs, and that whoever makes them deserves the win. I’d prefer if my country got it together and did something that would benefit its competitiveness long term, but as a living creature on this Earth, my primary interest (and yours as well) is in solving the climate crisis. If we refuse to offer more efficient choices and China does, then China will have demonstrated that it deserves the win. If you don’t like that, then don’t hand it to them.
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The Delaware Supreme Court made its ruling in the fight over Tesla CEO Elon Musk’s $55 billion pay package from 2018, reversing the Court of Chancery’s decision and reinstating the pay package.
But the Court still penalized Musk $1 plus attorney’s fees due to the award’s unfairness.
The ruling is the latest and likely last step in the long story behind Musk’s excessive pay package, tied to company performance milestones, which was first approved by shareholders in 2018 and worth approximately $55 billion if all milestones were met. At current share prices, the award is worth more like $139 billion.
For a short recap, TSLA shareholders approved a compensation package in 2018 which would award Musk, and dilute all other shareholders by around 8%, if the company reached financial targets the company claimed were difficult to achieve.
That package ended up being subject to a lawsuit, which alleged that Tesla misled investors when campaigning for the compensation package and that the board was too cozy with Musk himself, such that they did his bidding rather than acting in an independent manner.
The Delaware Court of Chancery, where Tesla used to be legally domiciled, found that argument persuasive, and ruled to rescind Musk’s entire pay package.
Delaware has long been known to be one of the most business friendly places for companies to host their legal domiciles. But after the ruling, Musk encouraged companies to leave the state, and moved his own companies out of it as well.
Later, Tesla held another vote on the same package, but Tesla’s captured board used the same misleading tactics in marketing it, and the court did not accept the new vote and again denied Musk’s pay package.
Tesla appealed that decision to bring it to the Delaware Supreme Court.
In the interim, the board gave Musk $26 billion in stock without asking shareholders first, draining the employee stock reserve and giving all of it to Musk. This award was meant to be a partial restoration of the 2018 award, but would be forfeited if the Supreme Court ruled in Musk’s favor.
Finally, TSLA shareholders once again voted for an even more ridiculous pay package last month, awarding Musk with stock worth a potential $1 trillion (and diluting all other shareholders by up to 12%) if all milestones of the award are met.
And one important note: each of these numbers are individually larger than any award ever given to any employee in the history of the world, by at least an order of magnitude, and are targeted towards a man who is currently doing his best to trash the company.
Now this week, we finally got the ruling from the Delaware Supreme Court, and it’s… an interesting one.
Court rules Musk gets his billions, but still has to pay a one dollar penalty (yes, really)
The Delaware Supreme Court ruled late Friday afternoon that the Court of Chancery was wrong in its decision to rescind all of Musk’s pay package, though it still accepted that some sort of penalty (“nominal damages”) is warranted.
It set that penalty in the amount of $1. In addition, the attorneys who sued Tesla (the plaintiffs) will be able to recoup attorneys fees (which will end up amounting in the hundreds of millions).
The court stated that while it may have accepted an argument that Musk should be entitled to part of the package – in recognition of how excessive the final package ended up being – the plaintiffs didn’t actually make that argument. The plaintiffs only offered complete rescission as a remedy, which the court decided was too “extreme.”
The court said that Musk deserves to be compensated for his time, and denied the plaintiffs’ argument that the significant appreciation of his own existing stock should be considered sufficient compensation. It called the decision “inequitable” (though it should be noted that despite this “lack of compensation,” Musk remained the richest man in the world prior to the court’s decision, largely due to the aforementioned stock).
And so, because plaintiffs didn’t make an offer for partial rescission of the pay package, and because the Court of Chancery didn’t itself craft a decision that partially rescinds the package (which it is allowed to do), the Supreme Court had to choose between giving Musk everything or nothing, and it chose to give him everything. Well, minus the attorney’s fees.
Electrek’s Take
I’m not a lawyer, but I did take time to read through the ruling before writing this, and to do my best to figure out the court’s reasoning here.
And, frankly, it seems like an odd decision to me from either perspective.
If Tesla was right all along, then it should be treated like it’s right – don’t hold back attorney’s fees or a $1 penalty saying that the plaintiffs just didn’t ask for the right remedy.
And if plaintiffs are right, then their win shouldn’t be dismissed simply because they didn’t ask for the exact right thing. If the court thinks they’re right but asked for too much, just give them part of what they asked for. If that’s not in the Supreme Court’s purview, then kick the decision back down and ask the Court of Chancery to reconsider and design a proper remedy.
What if Delaware is just spooked?
But maybe the decision isn’t just about what happened in this legal case, and more about Delaware trying to earn back its “pro-business” reputation which led over 2 million businesses to choose the state as their legal home.
That reputation has taken a hit in recent years as Musk has encouraged his ultra-wealthy pals to abandon the state. Despite that Delaware remains the state with the most established business law in the country, Musk moved to Texas hoping that he would be able to benefit from corruption there and push policies that would help him personally and harm shareholder rights – like a new law that bans shareholders from bringing actions like this court case unless they hold billions of dollars in Tesla stock.
Some other companies have also redomiciled, perhaps hoping to benefit from the same corruption Musk sought out.
This has spooked Delaware, and encouraged it to change its laws as a PR exercise to stop companies from leaving.
I wouldn’t be surprised if today’s ruling, beyond the legal rationale, was intended to have the same effect. What’s the big deal about spending $55 billion of Other People’s Money (namely, Tesla shareholders) if it helps Delaware regain its sheen of kowtowing to any corporation that comes its way?
Valuing one bad employee as worth more than all the rest
But past the legal aspects of this, the whole situation around the pay package stinks for just about everyone – employees, shareholders, and humanity as a whole.
There is certainly something “inequitable” about this award, but it’s not what the Supreme Court thinks it is.
Tesla is a company that is driven by its employees – some 120,000 of them. Most of those employees are bright people doing a good job at designing and building good products.
Most of them also don’t actively try to sabotage the company. But one does: Elon Musk.
Musk is bad for Tesla
He’s been an unbelievably bad CEO in recent years, with an unwise entry into politics both in the US and abroad, driven by his twitter addiction. His politics have largely focused on pushing white supremacist nonsense including support for German neo-Nazis and agreeing with a defense of Hitler, and funding and supporting groups that oppose renewable energy and vehicle electrification.
These actions have directly harmed Tesla through loss of expected revenue, and have also reduced the brand’s profile in the public eye. Tesla is now the only EV brand with negative perception, and it’s due to Musk himself. His actions have driven protests against the company, embarrassed owners and pushed many customers away – including business customers.
As a result, Tesla’s sales have been falling both in the US and around the globe in a rising EV market. All told, one study found that he cost Tesla over 1 million sales in the US alone with his braindead political takes. Even his own company had to chide him.
Finally, his actions in the past years have harmed electric vehicles as a whole, and thus been bad for the environment, which is the most important issue facing humanity. Musk has even rhetorically got into climate change denial himself.
Any single one of these actions should be a fireable offense in any normal situation.
And the worst part is, everyone with a brain knew how bad these actions were going to be ahead of time, but this dummy only figured that out last week (anyone want to bet that he’ll actually follow through on that about face? anyone? hello?).
And yet, the pay packages approved for him, improperly marketed by a captured board and voted for by shareholders who were promised vast wealth despite that these packages have and will massively dilute their holdings, value this one bad employee at significantly more than all other Tesla employees combined. And that money is coming out of the pockets of shareholders.
Money taken from shareholders and given to Musk, denying their share in company success
The tens of billions of dollars that will now be channeled to Musk, which he has shown he will use to harm Tesla, come at the cost of value that would have otherwise been created for shareholders and employees who hold shares, by diluting everyone’s holdings in the company.
Tesla could instead have spent its money on stock buybacks or dividends, thus allowing shareholders to enjoy the company’s success (which is the entire point of a public company), but instead it chose to play financial games that channel money from shareholders to the person that is currently acting least in the company’s favor.
So here we have a situation where a man who is causing harm to the company, the mission, the shareholders, and indeed the entire planet, is being valued at more than all of his employees put together and has a court jumping through what it itself deems are “narrow” hoops to uphold an award that is larger than any other employee has received in the history of the world. And regardless of the legal reasoning involved, I just don’t think any of that that is a good idea for anyone.
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An Angus ranch in southern Oregon has become the test case for a new kind of cattle-friendly solar, hosting RUTE SunTracker’s first commercial project.
The one‑acre, 120‑kilowatt array is the first real‑world installation of RUTE’s patented, cable‑stayed solar tracker designed specifically to coexist with grazing cattle. RUTE supplies the hardware and is also acting as the developer for its first regional cattle‑plus‑solar demonstrations.
What makes the setup different is the clearance. The tracker system provides about 10 feet of headroom, with panel heights reaching up to 16 feet across the array. That gives cattle full access to the pasture underneath while allowing ranchers to keep managing the land as usual. The project is interconnected to Pacific Power’s grid in Jackson County, Oregon.
Projects like this are getting more attention as the solar industry runs into land‑use limits. In the US alone, about 30 gigawatts of new solar capacity installed last year covered roughly 150,000 acres. Meanwhile, the country has close to 120 million acres of cattle pasture, much of it facing rising heat and water stress.
That’s where agrivoltaics come in. By adding solar to working pastureland, ranchers can create a second revenue stream while improving growing conditions for forage through partial shade.
“Within weeks of installing the RUTE canopy, the crew observed leafier forage and increased legume presence inside the array compared to outside,” RUTE president Doug Krause said. “Even on irrigated pasture, direct summer sun can be too intense.”
RUTE’s work has been supported by grants from the US Department of Energy’s American‑Made Solar Prize and the US Department of Agriculture. In October, Oregon State University’s Agrivoltaics Program began quantitative studies at the site to measure pasture production, adding hard data to what ranchers are already seeing on the ground.
Next, RUTE plans to take the project on the road. This winter, the company will present at cattlemen’s association meetings as it looks for ranch partners with onsite electric loads, such as irrigation pivot systems.
“In the near term, our focus is on regional, behind‑the‑meter installations so ranchers and power producers can see the equipment operating in real conditions,” Krause said. “While interconnection timelines are long, these projects allow us to build momentum as we connect with developers and ranches on utility‑scale pipeline.”
Read more: Sunrun + NRG launch a virtual power plant to ease Texas power demand
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Environment
Tesla rental fleet that bought into Elon Musk’s self-driving lies goes bankrupt due to depreciation
Dutch leasing company Mistergreen, known for its “Tesla only” fleet and bold bets on a future of autonomous robotaxis, is reportedly facing bankruptcy. The company’s financial collapse highlights the danger of buying into Elon Musk’s claims that Tesla vehicles would become “appreciating assets”—a prediction that has faced a harsh reality check in the used EV market.
According to reports from Europe, the Dutch Tesla-only car rental firm Mistergreen has wiped out its bondholders and is selling off its operations.
Mistergreen had built its entire business model around the premise of operating a fleet of Tesla vehicles that would not only hold their value but eventually generate revenue as robotaxis.
Instead, the company has been forced to write down millions in fleet value as Tesla aggressively cut new car prices over the last two years, pulling the rug out from under used EV prices, and never delivered on its promise of consumer vehicles becoming robotaxis.
Back in 2019, Elon Musk famously claimed that Tesla vehicles were now “appreciating assets” because of their Full Self-Driving (FSD) capability. He stated:
“I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.”
He even went so far as to suggest that a Tesla Model 3 could be worth $100,000 to $200,000 as a revenue-generating robotaxi. Mistergreen bought into that claim and was essentially a leveraged bet on this exact scenario.
They wrote their annual report in 2022:
Our focus is driven by the fact that Tesla’s electric vehicles are currently the highest quality electric vehicles on the market (in terms of battery quality, software updates, efficiency and range, charging network and speed), their hardware and software are prepared for future self-driving cars, and the quality and range of the Tesla (supercharger) charging network is superior. As a result, there is a significant market demand for Tesla’s and we anticipate that Tesla’s will have better residual value in the future due to the good quality of the Tesla’s currently on the market.
However, as we discussed in an article earlier this year about Elon Musk’s biggest lie, the reality has been the exact opposite. Tesla vehicles have depreciated faster than the industry average, exacerbated by Tesla’s own decision to slash prices to maintain demand and by the fact that it never delivered on its promise that software updates would make its consumer vehicles autonomous without supervision.
At its peak, Mistergreen had a fleet of over 4,000 Tesla vehicles, which is impressive, but it meant that it was hit even harder by the depreciation.
For buyers, a cheaper Tesla is great news. For owners or leasing companies holding thousands of them on their books, with high residual-value guarantees, it’s a death sentence.
Mistergreen had issued bonds to buy the Tesla vehicles, but it hasn’t been able to repay them since last year. It’s unclear how much of investors’ money has been wiped out by the bet, but it is in the tens of millions of dollars.
A couple of Dutch, Belgian, and German leasing companies will purchase the remaining fleet.
Electrek reached out to CEO Florian Minderop and co-founder Mark Schreurs for comments, but we didn’t hear back by the time of publishing.
Electrek’s Take
They believed Elon and they lost tens of millions of dollars worth of investors’ money for it.
We have been saying for years that while FSD is impressive, there’s no evidence that it can reach level 4 autonomy in consumer vehicles. Banking on it turning cars into appreciating robotaxis in the near term is financial suicide.
Musk has been promising “1 million robotaxis by the end of the year” since 2020. It’s now late 2025, and while we have seen progress, we only have a small pilot program in a geo-fenced area in Texas under constant supervision, and certainly don’t have a fleet of appreciating assets.
If you bought a Tesla for $50,000 in 2022 expecting it to be worth $100,000 today, you are likely disappointed. If you bought 4,000 of them with borrowed money, you are Mistergreen.
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