Tesla Chief Executive Elon Musk warned on Tuesday that the electric car maker was not immune to the impact of the global economy, which he said would be difficult over the next 12 months.
Speaking at the company’s annual shareholder meeting in Austin, Texas, Musk said the Model Y SUV was on track to become the world’s best-selling car in 2023 and reiterated that Tesla would start delivering its long-delayed Cybertruck pickup truck this year.
Musk said the company will try to advertise its cars, something it has never done before, a sign that even Tesla, the market leader in electric vehicles, is facing difficult times. “We’re going to try to do some advertising and see how it goes,” he said.
“Tesla is not immune to the impact of the global economic environment. I expect things to be difficult at a macroeconomic level for at least the next 12 months,” said the billionaire, who was casually dressed in a black T-shirt and trousers.
At the meeting, shareholders voted to appoint company co-founder and former chief technology officer JB Straubel to the board of directors. Proxy advisory firm Glass Lewis urged investors to vote against Straubel’s appointment, citing concerns about his independence.
Gene Munster, managing partner at Deepwater Asset Management, said Straubel, chief executive of battery recycling and materials company Redwood Materials, was considered a potential successor to Musk.
Shareholders also rejected a proposal to release a report seeking to lay out a succession plan for Musk.
Musk has been under pressure to address investor concerns over the lack of a clear successor, weak demand and delays in launching some new models, as well as social media platform Twitter, which he was involved in acquiring in October.
“I had to undergo major open-heart surgery at Twitter to ensure the company’s survival, which caused a short-term disruption,” Musk said Tuesday. Last week, he announced that Linda Yaccarino, a former advertising executive at NBCUniversal, would succeed him as Twitter CEO and will focus on the company’s products and technology.
In April this year, Musk said Tesla would prioritize sales growth over profits after failing to meet profit margin targets due to steep price cuts.
Musk sent an email to employees on Monday saying the company could not hire new employees, including contractors, without his personal approval and asking executives to “think carefully” before submitting hiring requests.
new model
Musk said at the meeting that Tesla hopes to produce 250,000 Cybertrucks per year based on demand. He said the electric carmaker expects to complete engineering and design of its next-generation Roadster this year and hopes to begin production next year.
He also revealed two new mass-market models under development and said he hoped to produce more than 5 million units, without elaborating.
Musk also said he would conduct third-party audits to ensure there is no child labor in the cobalt mines that provide raw materials for battery manufacturing.
“In fact, we will have a webcam up in the mine and if anyone sees any children, please let us know,” he said, adding that most of Tesla’s battery packs are iron-based and Tesla only uses “a small amount” of cobalt as a binder.
Board recommendations
Tesla shareholders quickly voted in favor of nearly all of the board’s recommendations on Tuesday. This meeting was attended by shareholders who were invited through a lottery and was broadcast live.
Tesla shares closed flat at $166.52 (roughly Rs. 13,700) on Tuesday, rising 0.6% in after-hours trading. The stock is down about 60% from its all-time high set in November 2021.
Shareholders also voted to elect Musk and Chairman Robyn Denholm to the board of directors.
Proxy advisory firm ISS recommended voting against Denholm, citing concerns about a lack of scrutiny of Musk and his brother Kimbal’s use of Tesla stock as collateral for loans.
Investors voted against publishing a report on “key man risk”. The proposal aims to identify key individuals and develop a succession plan.
“I don’t think so,” Musk said Tuesday when asked about rumors that he would step down as Tesla CEO.
Musk said at last year’s shareholder meeting that he would stay at the automaker as long as he was useful. In November, Tesla director James Murdoch testified in court that Musk had identified someone as a potential successor.
Tesla board members have discussed CFO Zach Kirkhorn as a possible successor as CEO, The Wall Street Journal reported last week, citing a person familiar with the matter.
© Thomson Reuters 2023
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