Elon Musk warns of tough economy, says Tesla not immune
At Tesla’s annual shareholder meeting, Musk said Tesla would advertise its cars, something it has never done before.
Tesla CEO Elon Musk has warned that the electric vehicle maker is not immune to the global economic environment, which he says will be tough over the next 12 months.
Speaking at the company’s annual shareholder meeting in Austin, Texas, on Tuesday, Musk talked about the demand for cars, making more money than competitors in a sluggish economy and said he would conduct a third-party audit of cobalt mines that provide Tesla with a key ingredient to batteries to make.
In a sign of troubled times even for Tesla, the electric car market leader, Musk said the company would try to advertise its vehicles, something it hasn’t done before.
“Tesla is not immune to the global economic environment. I expect the next 12 months to be just tough on a macroeconomic level,” said the billionaire, dressed casually in a black T-shirt and slacks.
At the meeting, shareholders voted to nominate the company’s co-founder and former chief technology officer, JB Straubel, to the board of directors. Proxy consultancy Glass Lewis had urged investors to vote against Straubel’s nomination, citing concerns about his independence.
They also rejected a proposal to publish a report attempting to create succession plans for Musk.
Musk is under pressure to address investor concerns about the lack of a clear successor, declining demand and delays of some new models, as well as his involvement in the social media platform Twitter, which he bought in October.
“There was a short-term distraction because I had to have major open-heart surgery on Twitter to ensure the company’s survival,” Musk said Tuesday. Last week, he announced that former NBCUniversal Media head of advertising, Linda Yaccarino, will succeed him as CEO of Twitter and will focus on products and technology at the company.
In April, Musk had said Tesla would prioritize revenue growth over profit after falling short of its margin target due to aggressive price cuts.
Musk emailed staff on Monday that the company cannot make new hires unless he personally approves them, including contractors, and asked executives to “think hard” before submitting hiring requests.
Tesla shareholders quickly voted on Tuesday with the board’s recommendations on nearly all of the proposals. The meeting was attended by shareholders who won invitations through a lottery and was also streamed live.
Tesla shares closed flat at $166.52 on Tuesday, rising 0.6 percent in after-hours trading. The stock is down about 60 percent from its all-time high in November 2021, hurt by Musk’s distraction with Twitter and concerns about declining demand for electric cars.
Succession
According to Gene Munster, managing partner at Deepwater Asset Management, Straubel, CEO of Redwood Materials, a battery recycling and materials company, is being considered a potential successor to Musk.
Shareholders also voted to re-election Musk and Chairman Robyn Denholm as board members.
Proxy consultancy ISS has recommended a vote against Denholm, citing concerns over a lack of control over the use of Tesla stock as collateral for loans by Musk and his brother, Kimbal.
Investors voted against publication of a report on ‘Key-Person Risk’. The proposal was intended to identify key people and prepare succession plans.
Musk said at last year’s shareholder meeting that he will stay with the automaker as long as he is useful. In November, Tesla CEO James Murdoch testified in court that Musk had identified someone as a possible successor.
Tesla board members have been discussing CFO Zach Kirkhorn as a possible CEO, the Wall Street Journal reported last week, citing a person familiar with the matter.