Tesla shareholders at today’s annual meeting swatted down challenges to billionaire CEO Elon Musk, who laid out an admittedly optimistic plan for the crucial months ahead.
“This is going to sound maybe a little cheesy, but at Tesla, we build our cars with love,” an emotional Musk told the crowd at the Computer History Museum in Mountain View, Calif. “We really care.”
He contrasted the dedication of the Tesla team with what he said was the typical mindset in the auto industry. “At a lot of other companies, they’re built by the marketing department and the finance department. There’s no soul, you know?” Musk said.
Musk acknowledged that the team has faced a lot of “incredible headwinds” in the course of manufacturing electric cars, battery storage systems and solar panels.
The biggest headwinds have to do with a slower-than-expected ramp-up of production for Tesla’s Model 3 car, which is widely seen as crucial to the company’s success.
“This is the most excruciatingly hellish several months I’ve ever had,” Musk said. “And a lot of other people at Tesla. But I think we’re getting there.”
Concerns have also been voiced about Tesla’s workplace injury record, about the Autopilot semi-autonomous driving system in its cars, and about its financial footing.
On every front, Musk said better news was on the way:
- He said Tesla was on track with Model 3 production: “It’s quite likely that we will achieve a 5,000-car week by the end of this month” and ramp up to 10,000 Model 3 cars per week sometime next year. More than 400,000 customers have put down deposits for purchase. For now, Tesla is concentrating on high-end configurations of the car, but Musk expects to start volume production of the basic $35,000 model by early next year.
- Musk said workplace injuries have declined to 6 percent below the industry average, and added that “we’ve got a shot” of reducing that figure to 50 percent of the industry average by next year. “Obviously we owe a great debt to the people who are building this car. I really care about this issue,” he said.
- The reliability and capability of the Autopilot system will “increase exponentially over the next six to 12 months,” Musk said. He said Tesla is planning a free trial of Autopilot for car owners who don’t already have the system installed, “probably next month.”
- Musk said “it’s really looking like we are going to have positive GAAP [generally accepted accounting principles] net income next quarter, as well as positive cash flow in Q3 and Q4, and as I’ve said before, we do not expect to need to raise any incremental debt or equity.” Credit rating services such as Moody’s aren’t so sure about that.
Tesla’s financial condition sparked a rare series of challenges this year, including a move to force Musk to give up the board chairmanship that he holds in addition to the CEO role.
Rebellious investors also sought to block the election of three directors: Elon Musk’s brother, Kimbal Musk; 21st Century Fox CEO James Murdoch, the son of Fox patriarch Rupert Murdoch; and Antonio Gracias, an early investor in Tesla who heads Valor Management.
Tesla’s general counsel, Todd Maron, reported that shareholders voted by a wide margin to reject all of the challenges.
Among other tidbits from Musk’s Tesla talk:
- Tesla’s Model Y compact SUV will have its unveiling next March and go into production in 2020, Musk said. Schedule-wise, he saw “something similar for Semi and Roadster.” The design for Tesla’s Semi truck was currently being revised to improve its efficiency, Musk said. He expected the reimagined Roadster to match the fastest gasoline-powered sports cars. In a nod to his other CEO role, Musk joked that the Roadster could have “a SpaceX option package.” He said Tesla will offer a compact car in less than five years. But a Tesla motorcycle isn’t in the cards — in part, Musk said, because he was almost run over by a truck while riding a motorcycle at the age of 17.
- Tesla plans to move ahead with a Gigafactory in Shanghai that will build cars as well as battery packs. Musk said a formal announcement could come “as soon as next month.” Those plans have been in the works for a long time, and China recently smoothed the way by loosening restrictions on foreign electric-car companies. Plans for a Gigafactory in Europe could solidify toward the end of this year. Meanwhile, Tesla’s Nevada Gigafactory is “about a third done right now” and could take four to five years to complete, Musk said.
- Musk said Tesla is planning a dramatic expansion in its Supercharger network of charging stations. The company is also working on a network of Tesla body shops that should extend at least to the 10 largest U.S. metro areas by the end of this month. “We want to aim for at least some number of body repairs to be same-day,” Musk said.
- One questioner asked Musk whether Tesla could equip its cars to receive data from SpaceX’s yet-to-be-built Starlink satellite constellation. “It’s possible,” he said. However, Musk said Starlink is more suited for fixed terrestrial service. “The Starlink user terminal is about the size of a small- to medium-sized pizza,” he said. “I’m not sure you’d want to put that on the roof of a Tesla.”
In response to a question, Musk acknowledged that he takes an optimistic view of Tesla’s prospects, particularly when it comes to schedules.
“I think I do have, like, an issue with time,” he conceded, drawing laughter from shareholders. “This is something I’m trying to get better at.”
For what it’s worth, Tesla’s share prices dipped slightly during today’s Nasdaq trading session but made a partial comeback in after-hours trading when Musk spoke.