Tesla held its annual shareholder meeting in Austin on Tuesday, an event Tesla now calls its Cyber Roundup.
Five proposals were on the agenda, including one that prompted Tesla’s board to come up with a public succession plan for CEO Elon Musk and other “key individuals” whose conduct and loss could pose a risk to the company and shareholders.
While Tesla will release official voting numbers later in the week, the board recommended that shareholders vote against the proposal for key person risk, so it likely won’t pass.
“At a time when Tesla’s technology leadership should be visible, the investment community sees us largely adrift, with management focusing on all things non-Tesla, watching Tesla’s brand preference drop 15 points last year, costing us margins .” said Karen Robertsdottir, a shareholder in Reykjavik, Iceland, at the event.
“When people look at this company, they see the company as synonymous with the CEO, and the discussion turns to anything but what it should be aimed at.”
Without saying it explicitly, Robertsdottir nodded to the concerns many investors have had about Musk’s controversial online presence, as well as his potential distraction from Tesla following its purchase and acquisition of the social media platform Twitter. Musk has also been criticized for repeatedly selling shares of Tesla to fund the Twitter buyout.
When Musk officially bought Twitter in late October, Tesla shares closed at $228.52. On Tuesday, they closed at $166.52.
Musk said on Tuesday that he has no intention of stepping down as Tesla CEO.
“I think Tesla is going to play an important role in AI and AGI and I think I need to monitor that to make sure it’s right,” he said.
AGI refers to “artificial general intelligence”, the concept that an AI can learn to perform any intellectual task that humans or animals can perform.
Shares of Tesla remained somewhat flat after the meeting, rising only about 1% in after-hours trading. That lackluster reaction from investors could be in response to the fact that most of the gathering simply recapitulated the highlights of the past 12 months, rather than sharing much news.
That said, Musk gave Cybertruck and Roadster updates, teased two new electric vehicles, said Tesla could change its advertising strategy, and shared his macroeconomic expectations for the next year. Tesla also announced JB Straubel as a board member.
JB Straubel returns to Tesla as a board member
Tesla shareholders have elected JB Straubel as an independent board of directors. Shareholder event attendees welcomed the return of the former Tesla CTO and co-founder. Straubel is also the founder and CEO of battery recycling startup Redwood Materials.
Shareholders also elected three directors for three-year terms. Tesla nominated Musk, Straubel and current chairman Robyn Denholm.
Straubel takes over the spot vacated by Hiromichi Mizuno, the former chief investment officer of Japan’s $1.5 trillion pension fund.
The new board member joined Tesla in 2004 and served as CTO for 14 years. Straubel was behind Tesla’s battery technology and led the construction and concept of Gigafactory Nevada, as well as the Model 3 sedan production ramp. Straubel left Tesla in 2019 and was replaced by Drew Baglino, vice president of technology.
Musk is teasing two new EVs
At the event, Musk teased two new electric vehicles that will bolster Tesla’s lineup. The CEO said Tesla was building one and designing another, but it wasn’t clear to him whether he meant Tesla was building a prototype or a production vehicle.
Musk said he wouldn’t go into details of the new vehicles, which would require their own launch events, but Tesla did show a silhouette of one of the vehicles. Based on its size, it’s possible that Tesla teased the $25,000 hatchback that Musk mentioned in 2020 during the company’s battery day.
Both of the new vehicles coming to Tesla’s lineup are expected to be affordable vehicles that will sell in much higher volumes.
“Elon’s guess is that we will probably make more than 5 million units a year from these two models combined,” Musk said.
Musk said Tesla will deliver its first Cybertrucks later this year and should be able to deliver 250,000 to 500,000 a year once production starts.
Tesla first announced the Cybertruck in 2019, but vehicle production has been repeatedly delayed. On Tuesday, Musk apologized for the delays and promised the product would be better than expected.
In July last year, the CEO said that Tesla is aiming to begin production of the Cybertruck in the summer of 2023.
Musk noted at the shareholder meeting on Tuesday that the Cybertruck will have enough attachment points so that third parties can develop attachments to improve the truck and “turn it into a camper.” Last week, during Tesla’s groundbreaking ceremony of its Texas lithium refinery, Musk drove a Cybertruck, complete with a roof rack. Musk has also said the vehicle will be “watertight enough to serve as a boat briefly.”
Production of the next-generation Tesla Roadster has been delayed again
“We expect to complete engineering and design of the next-generation Tesla Roadster this year and hopefully start production — this is not a commitment — hopefully start production next year,” Musk said.
Musk referred to the Roadster as “the icing on the cake,” meaning he doesn’t expect it to make a huge contribution to revenue.
“It will make a modest contribution to profitability, but it will be sick,” he said.
The second-generation Roadster, an electric sports car that surprisingly debuted in November 2017, was due to hit the market in 2020 but has been repeatedly delayed as the expensive car took the backseat of other Tesla products like the Model 3 and Model Y.
‘Don’t look at the markets for the next 12 months’
Musk speculated that next year will be a tough one for the economy due to several factors. Higher interest rates, he said, will have a major effect on car affordability.
“The vast majority of people buy cars based on the monthly payment, so it’s something like how much is the monthly payment? … Can they afford to pay the payment as interest rates rise and credit tightens? “
Musk noted that most banks are struggling to stay alive in the aftermath of the crisis created by the collapse of Silicon Valley Bank, meaning that “increasing the auto loan portfolio isn’t the first thing they need to do.” think”.
On a macro-global economic level, Musk expects the next 12 months to be tough for everyone, including Tesla. He expects many companies to go out of business, but said Tesla is in a good position to weather the storm and “come out stronger than ever”.
“It’s important to remember that there are good times and dark times, but the good times follow the dark times,” Musk said. “So my advice would be don’t look at the markets for the next 12 months. If there’s a dip, buy the dip and I don’t think you’ll regret it.”
Tesla to try traditional advertising
Tesla, a company that has long shunned conventional advertising, is going to “try a little bit of advertising and see how it works.”
Tesla doesn’t pay for traditional advertising like other automakers. And that was not really necessary. The company has become incredibly popular through other marketing methods, such as emails and referral programs that incentivize existing owners to attract customers, and of course Musk’s many tweets.
Now Musk seems willing to change that mindset as the company looks to promote new car features and advertise the affordability of its vehicles.
“There are great features and functionality about Teslas that people just don’t know about, and while there are obviously a lot of people who follow the Tesla account and my account… it preaches to the choir, and the choir is already convinced.”
We don’t yet know what a Tesla ad campaign would look like, but many are already speculating that Twitter will be home to Tesla’s first ads.
‘Tesla gets a ChatGPT moment’
Not a Tesla event goes by without Musk raving about the capabilities of the automaker’s AI — Musk said on Tuesday that it is “by far the most advanced real-world AI.”
Today, this AI manifests itself in Tesla’s advanced driver assistance system, confusingly called Full Self-Driving (FSD). The latest version of FSD can handle driving tasks in both urban areas and highways, but it still requires a human to stay alert and take control of the vehicle when needed. About 400,000 Tesla owners in North America have purchased the $15,000 beta software.
The other way Tesla’s AI will manifest is in the company’s humanoid robot, Optimus. Tesla showed new videos of Optimus development and testing at the shareholder event.
“As fully self-driving gets closer and closer to generalized real-world AI, that same software is transferable to a humanoid robot,” Musk said.
“My prediction is that the bulk of Tesla’s long-term value will be Optimus,” the CEO continued, reiterating a point he’s made before.
After the shareholder event, Musk joined CNBC’s David Faber for an interview covering a wide variety of topics from Tesla to Twitter, content moderation to free speech, the ethics of AI and Musk’s early investment in OpenAI, the startup behind the wildly popular conversation AI model ChatGPT.
“Tesla will have a ChatGPT moment, if not this year, then next year at the latest,” Musk said, referring to the technology’s rapid exponential breakthrough. “Suddenly 3 million cars can drive themselves without anyone. And then 5 million and then 10 million.”