Tesla Shareholder Meeting Yields New Product Promises, Retained Grip on Power for Musk

Steph Willems
by Steph Willems

Elon Musk’s role as chairman and CEO of Tesla remained intact after Tuesday night’s annual shareholder meeting, where a proposal to split the duties between two people sank once it came to a vote. Three directors, including Musk’s brother Kimbal, also saw re-election last night, despite protests from some shareholders who feel they lacked experience.

With the challenge to Musk’s dominance squashed, it was then time to do the thing he does best: placate investors with assurances and rosy production timelines. Anyone interested in a Model Y?

The fourth model in the automaker’s lineup — a crossover — will go into production in the first half of 2020, Musk claimed, with the public unveiling occurring next March. (The meeting included an new teaser of the Model Y, seen above.) A semi truck and resurrected Roadster will also begin production at that time, he said.

Cue jokes about bridges and swampland.

Before any of this can occur, Musk needs to build the necessary capacity and work out production troubles for the existing Model 3, which started production last summer. A reports continue cropping up, detailing safety issues and assembly line snafus, Musk claimed the company was well on its way to reaching its deferred goal of 5,000 Model 3s per week by the end of June.

It’s “quite likely” the goal will be reached, the CEO claimed. Some investors question the reliability of the figure, as the company is known to build a large number of cars in short bursts, with slow periods in between. Musk says there’s a third assembly line in the works to boost capacity. Should the company achieve its target, construction of pricier dual-motor and performance models should commence in July, with the base, $35,000 Model 3 variant appearing in small numbers late this year. Full production of that sedan won’t reach volume production until the first quarter of 2019, Musk said.

As for the troubling reports about the goings-on at Fremont Assembly, Musk said most injuries are the result of repetitive stress and back strain, not accidents. He then became emotional.

“At Tesla we build our cars with love,” Musk told the shareholders. “At a lot of other companies, they’re built by marketing or the finance department and there’s no soul. We’re not perfect but we pour our heart and soul into it and we really care.”

One shareholder in the audience expressed concern as to whether the company’s option of a “vegan” car (no animal products used in its manufacture) was truly vegan. As an online pundit stated, that might have been the moment we reached “peak California.”

For nervous investors, Musk had reassuring words. The company has no plans to raise debt or equity, he said, and expects “positive GAAP net income and positive cash flow in Q3 and Q4.” Many investors worry about the company’s sustainability, given the clip at which Tesla burns through cash.

As we wait to see whether these predictions and assurances pan out, there could be news on the China front in as early as a month’s time. Musk wants a Tesla/battery assembly plant in Shanghai, and it seems there’s already some groundwork in place. Another plant, this one in Europe, could start construction by the end of this year, Musk said.

[Sources: TheStreet, Reuters] [Image: Tesla]

Steph Willems
Steph Willems

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  • Orenwolf Orenwolf on Jun 06, 2018

    There are basically two paths here, right? Either Tesla ramps up or it won't. Either way, all the micro-examination of every issue will be old news. If they do ramp up, then that's that - they start fulfilling orders and folks move on to gripe about the next surely-fatal thing for Tesla (probably autopilot, or retaliation on solar panel tariffs or whatever). I fully expect that, like Apple, Tesla will always be "doomed" in the eyes of some. However, it's also possible that they don't ramp up, that the whole thing comes tumbling down, and the US loses an automaker that's seen as "aspirational" by a lot of the rest of the world (and indeed, targeted by a lot of international luxury makers). If this happens, no doubt, it'll be because of Musk, but it looks like those with money in the game are prepared to take that bet. For my part, I still have a model 3 reservation; I'm waiting for the AWD model to order. I'll post a review (vs my Mazda6) once I can.

    • Mcs Mcs on Jun 06, 2018

      I noticed that the article didn't mention the improvements in battery costs and energy density that were disclosed at the meeting.

  • Civicjohn Civicjohn on Jun 06, 2018

    If you really want to keep up with Sir Elon, you should go to the Bloomberg web page that tracks all things Elon: https://www.bloomberg.com/features/elon-musk-goals/

  • Ted Lulis Head gaskets and Toyota putting my kids through college👍️
  • Leonard Ostrander Plants don't unionize. People do, and yes, of course the workers should organize.
  • Jalop1991 Here's something EVangelists don't want to talk about, and why range is important: battery warranties, by industry standard, specify that nothing's wrong with the battery, and they won't replace it, as long as it is able to carry 70% or more of its specified capacity.So you need a lot of day 1 capacity so that down the road, when you're at 70% capacity with a "fully functioning, no problem" car, you're not stuck in used Nissan Leaf territory."Nothing to see here, move along."There's also the question of whether any factory battery warranty survives past the original new car owner. So it's prudent of any second owner to ask that question specifically, and absent any direct written warranty, assume that the second and subsequent owners own any battery problems that may arise.And given that the batteries are a HUGE expense, much more so than an ICE, such exposure is equally huge."Nothing to see here, move along."
  • Roger hopkins The car is in Poland??? It does look good tho...
  • Kwik_Shift_Pro4X The push for EV's is part of the increase in our premiums. Any damage near the battery pack and the car is a total loss.