Tesla CEO Elon Musk addressed shareholders on Tuesday at the company’s annual meeting in Austin, Texas, warning that the global economy would be difficult for the next 12 months, and Tesla was not immune to the challenges. Musk also confirmed that the deliveries of the long-awaited Cybertruck pickup would start this year.
Musk reassured shareholders that he was not stepping down as CEO of the company, responding to market rumors. He also revealed that the company would try advertising for the first time to boost sales.
Tesla Faces Tough Economic Conditions
Musk acknowledged that Tesla was not immune to the global economic environment, and he expected the next 12 months to be difficult for the company. He attributed the economic headwinds to macroeconomic factors, which would make the market tough for Tesla.
Tesla has already missed its margin target in the first quarter, cutting vehicle prices aggressively to compete with the slowing economy and rising competition. To offset this, the company is trying to boost sales by advertising its electric cars, a strategy it has never used before.
Tesla Tries Advertising to Boost Sales
Musk announced that Tesla would be trying advertising for the first time to boost sales, and the company will test this strategy to determine its effectiveness. The company’s recent missed margin target has spurred the move, which is expected to help it reach its target.
Tesla hopes that advertising will help the company stand out in a crowded market and promote its brand image. The company has enjoyed high demand for its electric cars, but competition has been growing, and the company has had to contend with declining margins.
JB Straubel Joins Tesla Board of Directors
At the annual meeting, Tesla shareholders voted to appoint the company’s co-founder and former chief technology officer, JB Straubel, to the board. Despite the proxy advisory firm Glass Lewis urging investors to vote against Straubel’s appointment, citing concerns about his independence, investors expressed confidence in Straubel, who is considered a potential successor to Musk, according to Gene Munster, managing partner at Deepwater Asset Management.
Shareholders also re-elected Musk and Chair Robyn Denholm as board members, rejecting the proposal to identify key persons and establish succession plans.
Musk Denies Stepping Down as CEO
Musk denied rumors that he was stepping down as Tesla CEO, which had circulated in the market. At the shareholder meeting, one shareholder asked Musk about the rumors, and he replied, “It ain’t so.”
Despite some investor concerns about Musk’s focus on Tesla after buying social media platform Twitter for $44 billion in October, Musk assured shareholders that he was focused on the company’s future. Last week he announced that NBCUniversal’s former advertising head, Linda Yaccarino, would succeed him as Twitter CEO, allowing him to focus on products and technology at the company.
Tesla’s Future Products and Developments
Musk briefly discussed Tesla’s future product plans, revealing two new mass-market models currently in development, with the aim of producing over 5 million of those vehicles. Musk also reaffirmed the company’s commitment to the long-delayed next-generation Roadster electric sports car, which he hopes will start production next year.
Musk also committed to conducting a third-party audit to ensure that there is no child labor in cobalt mines that supply the ingredient used in making batteries. He announced that the company would put a webcam on the mine, and if anyone sees any children, they should let the company know.
Investors Trust Musk’s Leadership
Tesla shareholders voted with the board’s recommendations on nearly all proposals, indicating their trust in Musk’s leadership. Despite concerns about the use of Tesla shares as collateral for loans by Musk and his brother, Kimbal, shareholders re-elected Robyn Denholm as chair.
Tesla’s stock closed flat at $166.52 on Tuesday and experienced a slight rise of 0.6% in after-hours trading. However, the stock has declined by approximately 60% from its record high in November 2021.
Elon Musk’s address to Tesla shareholders emphasized the challenges the company faces in the coming year due to the global economic environment. While assuring investors that he would remain as CEO, Musk revealed plans to advertise Tesla vehicles for the first time to boost sales. Shareholders also elected JB Straubel to the board, indicating their confidence in his potential as Musk’s successor. Despite concerns, Tesla investors continue to support Musk’s leadership, and the company remains committed to its future product plans, including the highly anticipated Roadster electric sports car.
Damon an avid economist Charles is an expert on global politics and economic pressures that can affect market conditions. He has a Masters Degree in Economics from Westminster University with previous roles including Investment Banking. Mark has over 10 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of his time analyzing earnings reports and watching commodities and derivatives. Damon reports timely updates about Technology sector.