Tesla Inc Chief Executive Elon Musk warned on Tuesday that the electric carmaker is not immune to the impact of the global economy, saying the next 12 months will be tough. At the company’s annual shareholder meeting in Austin, Texas, Musk said the Model Y SUV is on track to become the world’s best-selling vehicle in 2023, and reiterated that Tesla will begin deliveries of its long-delayed Cybertruck this year truck pickup.
In a sign of tough times even for electric vehicle market leader Tesla, Musk said the company would try to advertise its cars, something it has never done before. “We’ll try to do some advertising and see how it works,” he said.
“Tesla is not immune to the global economic environment. I expect difficult macroeconomic conditions for at least the next 12 months,” said the billionaire, wearing a black T-shirt and pants.
At the meeting, shareholders voted to appoint company co-founder and former chief technology officer JB Straubel to the board. Proxy advisory firm Glass Lewis had urged investors to vote against Straubel’s appointment, citing concerns about his independence.
Straubel, chief executive of battery recycling and materials company Redwood Materials, is considered a potential successor to Musk, according to Gene Munster, managing partner at Deepwater Asset Management.
Shareholders also rejected a proposal to release a report aimed at laying out a succession plan for Musk.
Musk has been under pressure to address investor concerns about a lack of a clear successor, weak demand and delays in some new models, as well as social media platform Twitter, which he was involved in acquiring in October.
“There was a short-term distraction because I had to do major open-heart surgery on Twitter to keep the company alive,” Musk said on Tuesday. Last week he announced that former NBCUniversal advertising executive Linda Yacarino will succeed him as Twitter CEO, where he will focus on the company’s products and technology.
In April, Musk had said that Tesla would prioritize sales growth over profit after slashing prices and missing margin targets.
In an email to employees on Monday, Musk said the company should not hire new workers, including contractors, unless he personally approves them, and asked executives to “consider carefully” before submitting hiring requests.
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Musk said at the meeting that Tesla hopes to produce 250,000 Cybertrucks a year based on demand. The electric automaker expects to complete engineering of its next-generation Roadster sports car this year and hopes to start production next year, he said.
He also teased two mass-market models in development, saying he hopes to produce more than 5 million of them, without elaborating.
Musk also said he would conduct a third-party audit to ensure that the cobalt mines that supply the batteries are free of child labor.
“In fact, we’re going to have a webcam on the mine, so if anyone sees any kids, please let us know,” he said, adding that most of Tesla’s battery packs are iron-based, and Tesla Only a “small amount” of cobalt was used as a binder.
On Tuesday, Tesla shareholders quickly voted in favor of the board’s recommendations on nearly all of the proposals. The meeting was attended by the shareholders who won the lottery and was broadcast live.
Tesla shares closed flat at $166.52 on Tuesday, after rising 0.6 percent in after-hours trading. The stock is down about 60% from its November 2021 all-time high.
Shareholders also voted to elect Musk and chairman Robyn Denholm to the board.
Proxy advisory firm ISS recommended a no vote against Denholm, citing concerns over a lack of scrutiny of Musk and his brother Kimbal’s use of Tesla stock as collateral for loans.
Investors voted against release of report on “key man risk”. The proposal seeks to identify key individuals and develop a succession plan.
Asked about rumors that he was stepping down as Tesla CEO, Musk said on Tuesday: “I don’t think so.”
Musk said at last year’s shareholder meeting that he would stay with 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 chief financial officer Zach Kirkhorn as a possible successor as CEO, The Wall Street Journal reported last week, citing a person familiar with the matter.
First published date: May 17, 2023 at 08:41 AM CST