Tesla shareholder meeting: Straubel elected to board; Musk reiterates 'production Cybertrucks' coming this year

·4 min read

Tesla held its annual shareholder meeting after the bell on Tuesday, with the company dealing with a variety of items, including board composition, shareholder votes on a variety of measures, long-term planning, and the return of a former Tesla exec as a new board member.

For the third time Tesla held its annual meeting at its Giga Austin factory in Texas, where the company also presented data and info on topics like vehicle production targets and roadmap, clean energy initiatives as mentioned in Tesla’s Master Plan 3, and software development projects like full self driving (FSD) Beta, and even the Optimus robot.

The timing of this year’s meeting, pushed forward a couple months compared to last year, angered some investors who feel Tesla hasn’t given them enough time to introduce measures for shareholders to vote on at this year’s meeting. With that in mind, here are the main highlights brought up at today’s meeting.

Board composition and commentary

L-R: Tesla Chief Executive Elon Musk, Tesla Chief Technical Officer JB Straubel and Yoshi Yamada senior advisor from Panasonic participate in a news conference at the Tesla Gigafactory near Sparks, Nevada, U.S. July 26, 2016.  REUTERS/James Glover II
L-R: Tesla Chief Executive Elon Musk, Tesla Chief Technical Officer JB Straubel and Yoshi Yamada senior advisor from Panasonic participate in a news conference at the Tesla Gigafactory near Sparks, Nevada, U.S. July 26, 2016. REUTERS/James Glover II

JB Straubel

A co-founder and former CTO of Tesla, JB Straubel was voted in as a new member of the Tesla board. Straubel left the company in 2019 to start his battery recycling company, Redwood Materials. There has been talk that Straubel would provide a steady hand on the board given Musk’s mercurial nature.

Robyn Denholm

Robyn Denholm was voted in for another term as chairperson, encompassing three years. Denholm and the current board was criticized in the past for not being able to control CEO Elon Musk and focus his attention on Tesla first and foremost. Proxy advisory firm ISS had recommended Tesla investors to vote against her re-election to the board prior to Tuesday’s meeting.

Elon Musk

In not much of a surprise, CEO Elon Musk retained his seat on the board for another term. In his address to shareholders, Musk announced the start of Tesla’s new next-gen motor, that he sees the global economy turning around after 12 months; reiterated FSD software would be end-to-end controlled by a neural network AI model, and the Tesla Model Y would be the top-selling vehicle globally. Following up on comments made by Denholm, Musk said Tesla would start rolling out “production Cybertrucks” later this year.

Cybertruck update from 2023 annual meeting
Cybertruck update from 2023 annual meeting

Musk also teased that the company is working on two new vehicle products, one of which is known to be the new 3rd-generation platform; the second could be the rumored newly updated Model 3 sedan. Musk said he sees volume of 5 million units per year between the two models.

In terms of succession, Musk said he has no plans to step down as Tesla CEO.

In an extended interview with CNBC's David Faber following the shareholder meeting, Musk said executives get a report every day about sales data from across the globe and use that data when adjusting price to maximize supply and demand. Musk did caution that the company does not want to overreact to real-time Tesla purchase data, and that Tesla isn't the only automaker adjusting prices frequently; other automakers do the same through incentives, Musk said.

Speaking of advertising, Musk said he was surprised by the shareholders' enthusiasm at the prospects of doing an ad spend. "It's a worth a try," Musk said said to Faber, as long as it is effective.

Musk also told Faber that he sees the value of its autonomous software as boosting a car's value by five times its normal worth. This would mean selling cars "at software margins," he said. Musk noted earlier at the annual meeting that he saw the long-term gross margin for its FSD software eventually hitting 80%.

With regards to China and its prospects, Musk said the company isn't demand-constrained, but rather supply-constrained when it comes to the amount of vehicles it can produce from Giga Shanghai.

Musk was more sanguine when it came to the prospect of Tesla's China business vis-à-vis Taiwan, with a prediction that he sees a Chinese invasion of the country as "inevitable."

Shareholder proposals

The “key person risk” proposal — speaking of succession, this proposal demanded a publicly available report that identified “key persons and actions to ameliorate the impacts of their potential loss.” Mainly focused on CEO Elon Musk, the proposal asked for a “clear public succession plan or strategy to ameliorate the impacts of his loss.” Shareholders voted down the proposal.

Proposal to conduct 3rd party report on child/enforced labor in supply chain — even though the proposal was rejected by shareholders, Elon Musk said the company would do a third party audit of its cobalt suppliers, though he stressed the company does not use much cobalt in its batteries.

This story is developing.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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