In the morning after Tesla’s shareholder meeting, shares of the company dropped significantly on market open, likely signaling a selloff from reasonable investors who objected to a vote to retain and overpay its CEO, Elon Musk, who has been responsible for a drastic drop in sales and earnings.

Tesla held its shareholder meeting yesterday, and shareholders voted on several high-profile proposals, the most-publicized of which would give CEO Elon Musk hundreds of millions of shares worth up to potentially $1 trillion, contingent upon company growth.

The headline $1 trillion has been widely reported and would be the largest payday ever for any employee of any company by multiple orders of magnitude if the company grows enough for all 12 milestone tranches to be met. The milestone tranches depend on company performance, and span over the next 7.5-10 years, with the goal of retaining Musk as CEO for that time period.

But Musk can still manage to get paid tens of billions of dollars – again, the largest payday ever for any CEO – even if the company grows slower than the S&P average. And another proposal printed 208 million shares, which the board can give to Musk at their discretion, independent of any milestone requirements.

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The vote was framed by Tesla as a necessity to retain Musk, and Musk himself threatened to leave the company if the vote did not go his way. He was probably bluffing, but it was enough to get 75% of shares to vote in favor of the incentive plan.

Many TSLA shareholders felt like they had no option other than to vote for the plan, as Musk’s incessant stock pumping with fantasies of robots and self-driving cars has been responsible for a huge run-up in share price, even as sales and earnings have dropped precipitously under his direction.

Due to Musk’s stock-pumping and the drop in earnings he’s caused at the company, Tesla’s price-to-earnings ratio is currently over 300. P/E ratio is an indication of the difference between market expectations and the company’s actual ability to make money, and lower numbers are healthier and less speculative. Most healthy companies have P/E ratios of around 20, possibly a bit more if they are in a high-growth industry.

But Musk had trapped Tesla shareholders: his lies are what led to TSLA stock being so high, and his threats to leave made shareholders fear a selloff in the event he didn’t get his absurd pay package, regardless of the benefits that might lead to in terms of company performance and stronger corporate governance. Nobody knows what actually would have happened to share price in the event that shareholders saw reason before the vote, but the common wisdom suggested a crash.

On other proposals, shareholders voted mostly lockstep with recommendations from Tesla’s captured board filled with Musk’s friends and family (and drug buddies). This included maintaining a supermajority voting requirement such that 67% of shares must agree to any change – an extremely high bar, now that Musk has been given incentives that could see his ownership share raise to over 25%.

The only significant measure on which shareholders broke with the board was a proposal to elect each company director annually – which would theoretically allow shareholders to respond more swiftly to problems in corporate governance (though they have as of yet shown disinterest in doing so).

Vote results lead to selloff in Tesla stock

Now, the market is responding to what happened yesterday, and it’s not nearly as enthusiastic as Elon Musk’s soldiers (yes, that is how one questioner referred to shareholders – they cheered, just before Musk referred to shareholders as “parasitic” in his response) in the room were.

At market open today, the stock immediately dropped nearly 5%, down 20 points from yesterday’s pre-meeting closing of $445.91 (which was already a down day for the company). The stock has moved up and down during the day, but as of this writing is at $424.

The drop was likely led by a selloff of the few investors who held out hope that shareholders might see reason. Given the news yesterday included a drastic pullback in shareholder voting rights, some shareholders might not want to keep their money in a company where they have effectively no say (this recent exodus of reasonable people probably influenced the vote results in the first place, too, as many people interested in healthy corporate governance sold their shares long ago).

The plan’s dilution may also have spooked shareholders. When new shares are printed, that reduces the value of all current shares, as all it does is cut the “pie” of the company’s market capitalization into smaller pieces. This means each share is worth less.

And the plans voted on involve the printing and granting of hundreds of millions of shares to Musk, which will dilute current shareholders. While this dilution hasn’t happened yet, the market can react ahead of time to the expectation of dilution.

Finally, the stock awards mean the company will be stuck with Musk for the foreseeable future. While this was the goal of the vote, to ensure that Musk not follow through on his threat to leave the company, he has also acted recently as the company’s chief saboteur, with most of his influence for more than a year being negative on company performance.

He’s spent $288M of his own money to cost Tesla $1.4B in lost profits and to harm the EV industry as a whole, he’s ruined Tesla’s formerly-shining brand, he’s made it harder for the company to do business overseas, he’s spread climate disinformation (and plenty of other types), he’s cost Tesla a million sales in the US alone with further drops overseas leading to cratering earnings, he pushed through a flop of a vehicle (that he’s had to sell spare inventory of to himself) and cancelled one that would have been successful, he fired the most important team in the company which caused chaos with suppliers, he’s distracted himself at all manner of other companies he owns (and with his social media addiction), he’s diverted Tesla resources to his own private companies while making threats to Tesla, he’s spent company resources to advertise for his own pay (rather than to sell Tesla products), he’s embarrassed and pushed away owners by trying to stoke civil war in other countries and engaging in corrupt government activities that killed hundreds of thousands of people… and then there’s the Nazi stuff.

That’s quite a list of fireable offenses, all within the last year or two, and it’s not an exhaustive list either. And Tesla has ten more years of that to look forward to, if this stock award runs its course.

The shareholders selling off their shares today probably held some vain hope that “Elon Musk’s soldiers” might see some amount of reason, and push back against some of the greater excesses reflected in yesterday’s shareholder votes. But alas, that did not happen.

And so, another straw has been added to the camels’ backs, with some of them finally breaking. Thus today’s selloff, as the “to the moon” enthusiasm seen in the room yesterday meets with a small semblance of reality.

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Honda wants in on the growing demand for affordable EVs. With the company’s CEO saying EVs selling for under $30,000 will be the main competition in the US, Honda may offer one of its own.

Honda mulls launching a sub-$30,000 EV in the US

Honda currently sells one fully electric vehicle in the US, the Prologue, which shares the same Ultium platform as the Chevy Equinox EV and all of GM’s electric cars.

The company confirmed that the Acura ZDX will not return for the 2026 model year, as it prepares for a new lineup over the next few years.

During the Japan Mobility Show last week, Honda unveiled the Super-ONE, a prototype of its smallest and most affordable EV set to launch in Japan next year, followed by Europe, the UK, and other global markets. Although the Super-ONE is not expected to arrive in the US, Honda may still offer an EV for under $30,000.

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Honda’s CEO, Toshihiro Mibe, told reporters in Japan last week (via The Drive) that looking ahead, the main competition in the US will be affordable EVs, priced under $30,000.

“So, for the future, we will consider coming up with EVs under $30,000 as well,” Mibe said. However, don’t expect to see it anytime soon.

Thanks to the Trump administration killing off the $7,500 federal tax credit and ending other policies promoting EV adoption, Honda believes it has some time before it needs to launch it.

“What’s making it difficult, of course, is with the IRA subsidies now gone, with the Trump administration in place, we have the sense that maybe EV growth has been moved back out, maybe out five years in the further future,” Mibe said.

Due to the changes, Honda is aiming to launch more affordable EVs priced under $30,000 closer to the end of the decade.

“If we think about whether we have to really come up with those affordable EVs right away, we get the feeling not really,” Mibe said, adding it will be around 2030 before we see it.

In the meantime, Honda will focus on hybrids. The company is set to introduce its next-gen mid-size hybrid platform in 2027, promising it will be more efficient, less costly, and free of rare-earth materials.

Although it’s still not under $30,000, Honda is offering over $16,500 off with stackable savings on the 2025 Prologue in most US states.

Want to see the Prologue in person? You can use our link to find the Honda Prologue at a dealership in your area (trusted affiliate link).