Musk warns Tesla shareholders to expect ‘challenging’ year
Tesla Chief Executive Elon Musk warned shareholders on Tuesday that a difficult year is expected due to global economic instability and high interest rates.
“It’s going to be a challenging 12 months,” Mr. Musk told Tesla’s annual shareholder meeting. He added, “Tesla is not immune to the global economic environment.”
His gloomy forecast came from Mr. Musk’s upbeat speech to a friendly crowd at Tesla’s factory in Austin, Texas. He has largely ignored criticism from activist investors on a variety of issues, including allegations of racial discrimination at its California factories, and whether the company is hostile to unions or whether its board is doing a good job of monitoring management.
He did, however, echo the activists, promising that Tesla would investigate whether any suppliers of cobalt, a battery raw material, used child labor.
“We’re going to have a third-party audit,” he said shortly after Courtney Wicks, executive director of Investor Advocates for Social Justice, asked shareholders to vote in favor of an investigation into cobalt mining.
“In fact,” Mr. Musk said, “we will put a webcam on the mine. If anyone sees any children, please let us know.”
Shareholders confirmed the company nominated JB Straubel to its board despite criticism from activist investors for being too close to Mr Musk.Last month eight investment funds and activist groups Appeal to Tesla Shareholders Rejected the nomination of Mr. Straubel, who spent years as a senior executive at Tesla before leaving in 2019 to start a battery recycling and materials company. Mr. Straubel “is clearly a company insider who already lacks independence,” the investor wrote.
Activists also complained that they were unable to put forward as many shareholder proposals as at previous general meetings, because they believed the automaker was deliberately suppressing dissent.
In October, Tesla moved its annual meeting to May from August and cut shareholders’ time by two months to submit proposals. Tesla announced a new deadline for proposals, Dec. 22, at the end of a 60-page regulatory filing, a change ignored by most activist investors.
“It’s really dodgy,” said Kristen Hull, chief executive of Nia Impact Capital in Oakland, Calif., which has previously challenged a Tesla policy that requires employees to sit in front of an arbitrator rather than in front of an arbitrator. Settle discrimination complaints in court.
According to a decision by the Securities and Exchange Commission, Tesla is not wrong to move up the deadline.
Mr. Musk and Tesla board members have dismissed activists’ complaints of discrimination, pointing to the company’s strong profit and sales growth as evidence that it is doing very well.
Some investors saw signs that Mr. Musk was responding to some criticism from shareholders, announcing last week that he would name Linda Yaccarino as chief executive of Twitter, which Mr. Musk hired last year. Acquired social media companies. Hiring Ms. Yacarino would free up Mr. Musk to run Tesla. Investors have complained that Twitter has distracted Musk from Tesla at a time when the company is facing slowing demand and increased competition that has led to price cuts.
Tesla has also faced criticism from Washington. A panel of eight senators led by Connecticut Democrat Richard Blumenthal called on Tesla this month to stop requiring employees and car buyers to resolve complaints before an arbitrator.
The letter said the practice “prevents workers and consumers from taking discrimination allegations and consumer safety complaints to court — effectively protecting companies from accountability and public scrutiny.”
Mr. Musk is apparently more interested in talking about Tesla’s plan to eventually produce 20 million vehicles, double the number that Toyota, the world’s largest automaker, typically produces each year. Tesla will launch two new models soon, he said, without giving details. He insisted that when the recession ends in a year or so, Tesla will be stronger than its rivals.
“Good times follow bad times,” he said.