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Tesla's Shareholder Meeting Drops Some Interesting Tidbits

William Maley

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There were serious concerns before the beginning of Tesla's annual shareholders meeting mostly due to CEO Elon Musk's erratic behavior over the past month or so. But Musk was on his best behavior during the meeting, where some big announcements were made.

On the business front, Tesla shareholders voted to keep Antonio Gracias, James Murdoch, and Kimbal Musk on the board, despite criticisms from a group of shareholders that they aren't fully independent from Musk. There was also the proposal of splitting the chairman and CEO posts held by Musk, with one investor saying it has become difficult for Musk to oversee the company. This motion would be defeated.

"At Tesla we build our cars with love. 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," said Musk, choking up on the mic after the voting took place.

From there, Musk went on to talk about what's in the pipeline for Tesla. He started with the Model 3 by claiming it was the best selling mid-sized premium sedan in the U.S. and had a graph to prove it - though we're a bit dubious as to this claim since the graph doesn't label the x and y axises.

Musk also claimed that Tesla is producing 3,500 Model 3s per week and is “quite likely” to be building 5,000 of the sedans a week by the end of this month. This will happen through the addition of a third production line at their Freemont, CA Plant. 

“The biggest constraint on output is general assembly. We can probably get to 5,000 a week with the current two general assembly lines. But with the third one, I’m highly confident that we can exceed 5,000 units per week,” said Musk.

Production of the mystical $35,000 Model 3 will begin sometime early next year according to Musk. 

In other product news, the Model Y crossover was teased once again. The current plan is to reveal it next March with production to begin in 2020.

Autopilot made some news during the meeting as Tesla announced a new free trial to owners who haven't decided to opt-in. Musk revealed that a planned Autopilot upgrade will begin rolling out later this week and promises a marked improvement.

Other news from the meeting:

  • Tesla will be adding another plant in Shanghai. The plant will produce battery packs, cars, and powertrains. More details may be announced as soon as next month. Musk also revealed plans to build a plant in Europe towards the end of this year.
  • Tesla service centers will be increasing in size and adding body shops. This could solve one of biggest issues of the current system to repair Teslas involved in accidents. Currently, Tesla requires a body shop to order parts directly from the factory, which takes weeks for parts to be delivered.
  • The semi-truck has been going through various revisions in terms of design and powertrains with the goal of making it a world-wide vehicle.

Source: Bloomberg, (2), Reuters, Roadshow

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All interesting smoke and mirrors stuff. I want Tesla to survive, but I have to question if they can deliver profitably at a time that costs have gone up so fast.

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